Thu. Mar 28th, 2024
Intel 5G

Intel has said that it will no longer be working on 5G chips for phones, leaving Apple with only one option: Qualcomm–the same company Apple had been engaged in a legal battle with until midday Tuesday.

Intel on Tuesday said that it plans to abandon working on 5G modems–the next generation of wireless technology that is supposed to speed up mobile connections. The company had been working on 5G modems for Apple, with the chips expected to be ready for integration by 2020. Lately, Intel had raised concerns that the chips won’t be ready until 2021.

“The company will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020,” Intel said in a press release. Intel’s only customer in modems is Apple.

The announcement came after news from earlier Tuesday claimed that Apple and Qualcomm have reached a settlement in their battle over licensing royalties. Both the companies announced the surprise agreement through a joint press release on Tuesday, at the same time lawyers presented opening arguments in a courthouse in Southern California. Apple and its contract manufacturers had delivered their statements, and Qualcomm’s head lawyer had nearly finished his remark when the courtroom was subjected to the unexpected news.

In a statement, Intel added that it will “complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices.” It also said it will “continue to invest in its 5G network infrastructure business.”

“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,” Intel CEO Bob Swan said in a statement.

Apple in January 2017 had accused Qualcomm of anticompetitive practices that resulted in the price hike of chips, restricted competition and hurt customer choice. Qualcomm, the world’s largest mobile chip maker, had countered that Apple won’t be able to make iPhones without its components and that it deserved to be paid for its innovation.

If Qualcomm was to lose to Apple, the company would have had to change its entire business model. The agreement would also serve well for consumers, who will once again have access to fast Qualcomm modems–including ones already compatible with existing 5G networks.

“With the market for 5G accelerating, the need to guarantee a 5G iPhone in 2020 clearly proved a powerful motivator for a settlement,” CCS Insights analyst Geoff Blaber said. “Commercial pragmatism ultimately won.”

ALSO READ:

 

Leave a Reply

Your email address will not be published. Required fields are marked *