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With the announcement today by Apple and Qualcomm that the two fierce rivals have definitely buried the hatchet, the situation immediately questioned the fate of Intel 's modem business. As the single largest customer for Intel's smartphone modems, Apple's business and huge order volume have made Intel's smartphone modems business an all-or-nothing affair. Today, while Apple and Qualcomm seem to be reconciling again with Apple and are using Qualcomm's modems, Intel announced this afternoon that it was pulling out of the 5G smartphone modems market entirely. .
In the short announcement, Intel announced plans to launch 5G modems for smartphones, including modems planned for next year, ie the smartphone version of the XMM 8160. Intel's logic, not to mention the Apple / Qualcomm deal, is rather Bob Swan, CEO of Intel, pointed out that the company did not see "clear path to profitability and positive returns". Without a major customer, Intel could not recover its research and development costs.
Note however that this does not mean that Intel is completely getting rid of the modems for smartphones, at least not right away. The company announcement also clearly states that Intel will continue to provide 4G modems to existing customers (Apple, for example) in order to meet their commercial commitments. While we will not see Intel-equipped phones in the 5G era, Intel will be at the forefront of the 4G era – at least as long as Apple continues to buy modems from them.
At the same time, Intel is also announcing that, along with the cancellation of their smartphone's modem plans, they will also take this opportunity to re-evaluate the rest of their customer modem portfolio. Intel's projects for the XMM 8160 go far beyond smartphones, but also in devices such as PCs and broadband access gateways. Now, the company needs to determine whether these plans still make sense – whether the XMM 8160 will be competitive in these markets and whether continued development and manufacturing makes sense without the big smartphone customers. At this point, Intel faces a fierce battle over the rest of the customer modems market and it is very likely that Intel's reassessment will find that the company has no place in this highly competitive market.
It is however interesting to note that if Intel is about to throw the sponge completely on the 5G client, the company also states its intention to remain in the lucrative 5G infrastructure market and that the announcement of 39, today only concerns customer products. To use Intel's buzzword, the company continues to steadfastly focus on its data-centric approach to chips, which means that they continue to invest heavily in servers, the company's main business. 39, infrastructure and AI.
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