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Intel 5G smartphone modem output is a surprise
On April 17, Qualcomm (QCOM) and Apple (AAPL) suddenly settled their two-year license dispute, in which both companies had spent millions of dollars. The dispute was to result in a settlement rather than a court decision because both parties had a lot at stake. But the timing of the settlement was a surprise, as both parties were ready for a clash in court. What was even more surprising was Intel's announcement (INTC) of the end of its 5G smartphone modem business shortly after the announcement of the settlement between Qualcomm and Apple.
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Intel said it would continue to provide its existing 4G modem to its customers but would stop working on the 5G modem for smartphones, which it planned to launch in 2020. Intel had been putting a lot of effort into the 5G modem to secure the activities of Apple. Intel seemed to evolve rapidly in the 5G space, perhaps trying to catch up with Qualcomm.
The announcement made by Intel makes sense since Apple is the only major customer for modem chips and the iPhone manufacturer's truce with Qualcomm means that it will provide modems for some iPhones. In addition, given Qualcomm's lead in the 5G modem market, its modems could appear in iPhones 2020. Apple was the only force that pushed Intel to invest in the modem. This factor having disappeared, it made no financial sense to continue the investment.
However, the announcement of the announcement of Intel has fueled speculation that the chip maker would be the source of Qualcomm-Apple.
Was Intel behind the Apple-Qualcomm settlement?
Apple was fighting with Qualcomm because it had the Intel modem to fill the void. Intel delayed its 5G modem in November 2018, jeopardizing Apple's iPhone 5G launch plan in 2020. Apple looked for other vendors, but none met its requirements.
Some analysts believe that Intel has probably informed Apple of its intention to withdraw from the 5G smartphone modems sector, thereby removing Apple's only support in the fight against Qualcomm. As Apple no longer had any other 5G modem provider to meet its qualitative and quantitative requirements, it reached an agreement with Qualcomm, which could explain the sudden settlement and the immediate announcement by Intel of its exit of the sector of smartphones 5G.
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