Intel Explains Why It Had to Sell Its Modem Business to Apple

Intel modem

It has been almost four months since Intel sold its modem business to Apple. And what made the Santa Clara-based chipmaker to do so? Well, a new press release from Intel accuses Qualcomm for its decision to back out from the modem market.

As you might know, Intel had been using Qualcomm’s patented technologies to makes its own modem. According to the brand, the San Diego-based chipmaker had charged Intel royalties so high that the amount was almost equal to the modem itself.

As a result of high royalty charges, Intel’s modems were expensive. Qualcomm, on the other hand, offers its modem for much lower prices, since it doesn’t have to pay the royalties. Therefore, it makes sense for any OEM to buy modems from Qualcomm rather than that from Intel.

So, according to the Santa Clara-based chipmaker, Qualcomm artificially and insurmountably created barriers to fair competition, creating its monopoly in the modem market, due to which, Intel had no clients for its modems, leading to its exit from the market.

Apple was the only major client Intel had for its modem during the short period when the chipmaker’s modem division was doing business. And here is a quick throwback why Apple decided to buy modems from Intel:

If you are familiar with the tech industry, you might know that the Cupertino-based tech giant used to purchase modems from Qualcomm. However, there had been a conflict between the two brands, after which, Qualcomm denied to sell its modems to Apple. This was when Apple started getting modems for its smartphones from Intel.

Later on, Apple and Qualcomm settled their differences and made a deal where the Cupertino-based tech giant agreed to use Qualcomm’s modem in its smartphones for the next six years. So, Intel lost the one and only major client it had. Hence, the company decided to sell off its modem business. The iPhone maker saw this as an opportunity to invest for the future and bought Intel’s modem business for a billion dollars.

Source: Intel