News Article

Apple in discussions with Intel to buy mobile chip unit

Race to 5G spurs Apple on talent and tech hunt

According to a study from The Wall Street Journal, Apple is in talks to purchase Intel‘s smartphone chip unit for at least $1 billion.

Intel announced it would withdraw from 5G mobile modems in April, and Apple intends to leverage the expertise and intellectual property of the company to create these chips on its own.

Since 2016, Apple has been buying Intel’s iPhone chips to try to restrict its reliance on former U.S. provider Qualcomm, with whom it had a royalty conflict. But Intel has failed to discover other vital clients as it relies primarily on computer and data centre chips.

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“This would be a clear doubling down on 5G for Apple, which stays at the centrepiece of the company’s potential smartphone, with these chip resources offering Apple further influence over its supply chain and key device layout,” said Dan Ives, Wedbush Securities Managing Director.

The choice by Intel to leave the money-losing company arose hours after Apple and Qualcomm resolved the royalty controversy. Qualcomm agreed to deliver 5G modem chips to Apple for iPhones to be marketed in 2020. For now, by sourcing from Qualcomm, Apple will try to catch up with 5G devices of Chinese and South Korean competitors.

But purchasing Intel’s activities would allow Apple in the future to maintain its choices free and mode its chips.

Monday’s report from the WSJ said the talks with Apple-Intel could conclude over the week to come. Intel rejected the application for remarks from Nikkei, whereas Apple did not react instantly.

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