Apple reportedly planning to buy Intel's 5G smartphone modem business for $1 billion

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Apple reportedly planning to buy Intel's 5G smartphone modem business for $1 billion

Apple has working on developing its own modem business in a bid to decrease its dependence on other companies such as Qualcomm.

Apple is in advanced talks with Intel to buy its 5G smartphone modem business, a move that will help the iPhone maker to take control of the critical component that would be powering its 5G iPhones in the near future.

Intel back in April this year announced that it was leaving the 5G smartphone modem business after Apple in a rather surprising move settled its lawsuit with Qualcomm by going back to using its modems in its iPhones. At the time, Intel's CEO Bob Swan had said that the company had exited the 5G modem business owing to the settlement between the iPhone maker and the Qualcomm. "In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn't see a path," the Intel CEO had said in an interview with The Wall Street Journal.

Now, according to a new report by the Journal, Apple is reportedly in advanced talks to buy Intel's 5G modem unit. The report further states that the a deal that includes patents and staff valued for $1 billion or more could be reached as soon as next week.

A deal with Apple makes a lot of sense not just for Intel but for the iPhone maker as well. According to a report by The Verge, after Apple reconciled with Qualcomm earlier this year, Intel was looking for a buyer for its 5G smartphone modem business. Prior to that it was the sole supplier for modems to Apple in 2018.

Apple, on the other hand, has been trying to build its modem for quite some time now. Prior to a deal with Qualcomm, the company had been working on developing its own modem unit - which is somewhat similar to the CPUs that power the company's iPhones and iPads. This would eventually decrease the reliance of the company on other companies such as Qualcomm and allow Apple to operate independently. Buying out Intel's 5G smartphone modem unit, and its expertise in the area, is a win-win situation for both Apple, which is trying to manufacture modems in-house, and Intel, that has now exited the business.