Intel Exits 5G Modem Business Following Apple-Qualcomm Settlement

The Intel XMM 8100 5G modem

After Apple and Qualcomm announced that they have dropped all lawsuits against each other, Intel has now announced that it is exiting the 5G modem business. The company will continue to invest in its 5G network infrastructure business.

The company had originally planned to launch a 5G modem in 2020 which has now been shelved.

Intel will also be assessing the market for 4G/5G opportunities in the Internet of Things space, PCs, and other data-oriented devices. Despite exiting the modem business, Intel will continue to fulfill its 4G commitment to existing customers.

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

Intel’s press release was short on other details, though the company promises to provide more details at its Q1 2019 earnings.

Apple and Qualcomm had announced earlier today that they have reached an out of court settlement which includes a six-year license agreement and a multiyear chipset supply agreement.

Our Take

Intel currently supplies 4G modem to Apple for its 2019 iPhone lineup. After years of trying to secure modem orders from Apple, Intel finally managed to secure a win starting with the iPhone 7 in 2016. However, the performance of Intel’s modem was always inferior to that of Qualcomm in terms of performance.

Despite that, Apple exclusively switched to Intel’s Gigabit modem for its 2018 iPhone lineup. In spite of securing such wins, Intel has been struggling with its 5G modem development and the Apple-Qualcomm settlement paves the way for the Cupertino company to use 5G modem from Qualcomm in its future iPhones.

The 5G modem development issue from Intel’s side led to tensions between Apple and Intel relationship. On the other hand, Qualcomm has been leading the 5G modem development race and it has already released its second-generation mmWave modem in the market.

[Via Intel]