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Intel exits 5G smartphone modem market as Apple, Qualcomm reach settlement on ongoing litigation

Intel this afternoon announced that the company would be exiting the 5G smartphone modem business, instead choosing to focus on opportunities for 4G and 5G modems in PCs, internet of things devices, and other data-centric devices. 

The announcement arrived only hours after Apple and Qualcomm reached a settlement and agreed to drop all current litigation against each other.

Intel, in turn, stated that it would honor all current customer commitments for existing 4G smartphone modems, but will not be releasing 5G modems in the smartphone market.

Intel CEO Bob Swan offered the following comments:

“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.”

Following Apple’s legal battle with Qualcomm, Intel was the sole supplier of modem chips for the 2018 iPhone lineup and planned to provide 5G chips for Apple in 2020. 

Intel had been working on its XMM 8160 5G chip, which was said to be en route for Apple’s 2020 iPhone lineup. It was also rumored that the relationship between Apple and Intel had grown tense, as Intel had missed developmental deadlines on the 5G chip. This, in turn, is said to have caused Apple to lose confidence in Intel’s ability to provide the product on time.

Apple appears to be opting for Qualcomm’s 5G chips to meet demand for its 2020 iPhone models. Apple’s settlement with Qualcomm included a six-year licensing agreement and a multiyear chipset supply agreement. 

To reduce its reliance on Qualcomm, Apple is working on its own chip technology, but Apple’s own modem chips aren’t expected to be ready until 2021. 

Stay tuned for additional details as they become available.

Via MacRumors