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Apple in Advanced Talks to Buy Intel’s Smartphone-Modem Chip Business
- bpye 7y agoThis worries me. Wouldn't this leave us with Qualcomm once again the only manafacturer of cellular modems for everyone else? I somehow doubt Apple would keep supplying the Intel parts to any other OEMs.
- tolqen 7y agoNobody except Apple bought the Intel parts anyway (possibly because they were absolute flaming garbage relative to Qualcomm’s products), which is why we’re in this position in the first place.
- dnautics 7y agoWasnt ericsson supposed to buy a buncha intel modems?
- StudentStuff 7y agoIIRC that deal was Ericsson fabbing their LTE & 5G basestations on Intel's 10nm process, but Intel's 10nm process can't produce large working chips in volume (and likely never will), which has kneecapped Ericsson as a cellular vendor.
- godzillabrennus 7y agoTIL Ericsson still exists.
- TorKlingberg 7y agoEricsson is one of the biggest vendors of telecom network equipment, including 4G base stations. They sold the phone business to Sony years ago.
- wycy 7y agoI have an iPhone with an Intel modem and can confirm: it is flaming garbage. It's fine in good service areas but in the event of subpar service it basically just craps out entirely. Qualcomm modems seem to handle the same areas just fine.
- wl 7y agoTelit's LE910 series uses Intel parts. For my uses, they've been very nice.
- mcphage 7y ago> Wouldn't this leave us with Qualcomm once again the only manafacturer of cellular modems for everyone else? They already are.
- mschuster91 7y agoI thought Mediatek also did their own modem+cpu combos?
- abbe_k 7y agoThey do. And so does Samsung. I haven't checked but I would be surprised if Huawei didn't have their own modems too.
- yaantc 7y agoYes Huawei too with the Balong modems, through their HiSilicon subsidiary: http://www.hisilicon.com/en/Products/ProductList/Balong http://www.hisilicon.com/en/Products/ProductList/Balong In a few years it could be so that all the tier 1 smartphone vendors have their in-house cellular modem.
- olliej 7y agoEveryone already has to pay a % of the end device whether or not they use Qualcomm parts, regardless of the cost of the device. Because Qualcomm is only interested in “standards” where they are the only provider so get to cut anyone who doesn’t accept their novel interpretation of FRAND
- AnthonyMouse 7y ago> Wouldn't this leave us with Qualcomm once again the only manafacturer of cellular modems for everyone else? I somehow doubt Apple would keep supplying the Intel parts to any other OEMs. This could go either way. Apple is clearly doing this because they want to give Qualcomm the finger. But if they really want to do that then they do sell parts to any other OEM. Most of the devices these radios go in don't actually compete with Apple products. The largest volume is in low end phones and things with radios that aren't even phones, like base stations and smart meters. Apple could sell the chips for commodity prices and make a bit of profit for itself while still undercutting Qualcomm and making them hurt bad in the volume segment of the market where Apple doesn't otherwise compete but where Qualcomm makes a lot of its money.
- ChuckNorris89 7y ago>Apple could sell the chips for commodity prices and make a bit of profit for itself Never gonna happen. You can't just sell the chips, you also need to provide a TON of support to your customers and integrators and in the semiconductor business that's way too much of a hassle for Apple to be worth it. They have much bigger fish to fry.
- benj111 7y agoFrom what I hear about Qualcomm, theres enough companies that would be willing to jump through the hoops to avoid them, as Apple themselves did Intel. They could always set up a joint venture, Apple brings the IP. The partner does the day to day stuff. It doesn't make a lot of sense to be sitting on top of IP and R&D that could be amortised over a much larger number of units.
- deleted 7y ago[deleted]
- wycy 7y agoApple seems like they could be vindictive enough to get into the business of selling their own modems, and to do so at prices that undercut Qualcomm, despite low cost hardware being way outside of their normal business model. Overall, I'd support that.
- kingosticks 7y agoWouldn't this then be a reason for a regulator to block a deal like this? Would Apple have to 'promise' to at least try and sell chips to other OEMs in order to avoid leaving others in a monopoly situation with Qualcomm?
- askvictor 7y agoThe alternative being for Intel to just shutter the division, leaving Qualcomm with a monopoly?
- kingosticks 7y agoI honestly don't know what's better: screwing everyone altogether + Intel job losses, or screwing everyone except another already big fish? A better alternative would be for another interested buyer to appear at the negotiating table, presumably that would require the price to somehow magically come down. Edit: @DannyBee above has already helpfully commented that the FTC has previously required that the buyer continues to sell to / support customers for some time period following the purchase.
- rasz 7y agoNah, Chinese are developing "their own" designs, like http://www.unisoc.com/unisoc-launches-5g-technology-platform-makalu-and-its-first-5g-modem-ivy510 http://www.unisoc.com/unisoc-launches-5g-technology-platform... oh wait, Unisoc is the company Intel shared 5G modem secrets with https://www.scmp.com/tech/science-research/article/2187895/intel-ends-5g-partnership-chinese-government-linked-chip-maker https://www.scmp.com/tech/science-research/article/2187895/i... ...
- DannyBee 7y agoIn mergers/acquisitions like this, what used to happen is that the FTC/etc would require that they continue to sell or support all comers for some period of time. For example, when Google bought ITA, ITA was required to continue licensing the software on "commercially reasonable terms" to other people. See https://www.wired.com/2011/04/google-ita/ https://www.wired.com/2011/04/google-ita/ for an example. Now, whether this will happen in today's FTC/DOJ, no idea. But that is one traditional path here.
- mrweasel 7y agoAs others pointed out, there are other modem manufactures. The interesting bit is whether or not Apple would allow other manufacturers to buy their modems. I don't think it makes a ton of sense for Apple to resell their A-series CPUs, but 4G modems is a little different, they're more generic. If they manage to make good modems why wouldn't they sell them to others? The people buying iPhones won't switch to an Android device, just because it's the same modem.
- londons_explore 7y agoIf apple buys the modem division, they'll be integrating the modem into the SoC. It will be an advanced process node and they won't be scared of using more silicon area to get more performance. By being on the same SoC, they might combine the application and baseband CPU's into one too using something like trustzone. Cheapo android handset makers wouldn't be able to afford the resulting silicon - it'll be too expensive due to the large area. It'll also likely diverge from the way everyone else builds modems - no more AT commands!
- ksec 7y ago>Wouldn't this leave us with Qualcomm once again the only manafacturer of cellular modems for everyone else? Does it matter? 1. Intel aren't selling their modem to anyone else anyway. 2. MediaTek Still supplies Discrete Modem. 3. Apple, Huawei, Samsung are already 50%+ of the market. With Xiaomi, BBK ( Vivo OnePlus Oppo ) going to have their own / shared Modem solution in a few years time. Which combined to ~20% market. There isn't that much of a market left for players other than Qualcomm and Mediatek.
- simonh 7y agoI think the real risk here is Apple sucking the profitability out of the high end modem business. Qualcomm makes most of their high end modem money out of Apple. The other flagship Android phone makers may not be a big enough market to justify Qualcomm developing the very costly high end modems they need. That could leave Apple as the only manufacturer with the best modems. We’re at least a few years away from that possibility, especially given the poor state of the Intel modem technology, but if Apple can pull this off they’ll have yet another technological exclusive differentiating feature. This time, one truly central to the platform technology.
- ohazi 7y agoQualcomm has prevented 20 years worth of upstarts from even attempting to enter the high-end modem business. There isn't a market for high-end modems, there's only Qualcomm. At this point, nuking Qualcomm's profitability seems like the only reasonable thing left to try.
- simonh 7y agoSo now instead of Qualcomm monopolising high end modems in phones, we may well end up in a situation where Apple will. Wonderful. High fives all round.
- danaris 7y agoThat seems very unlikely. For one thing, Qualcomm isn't going to be ditching the modem business; they just aren't allowed to be predatory monopolists on it anymore. For another, because Qualcomm isn't allowed to use the anticompetitive tactics they've used in the past, it will now be possible for someone else to break into that market. It'll take a lot of time, money, and effort, to be sure, but if someone else can get modems working even in the same quality ballpark as Qualcomm's, they'll have a guaranteed revenue stream from people who would be overjoyed to stick it to Qualcomm. And, of course, at this point, there's no guarantee that Apple will be making modems for anyone but themselves.
- 7y ago
- IceWreck 7y agoApple sued Qualcomm to drop their prices and used Intel to keep them in check. After their settlement/agreement with Qualcomm, they started using Qualcomm and dropped Intel and then Intel quit the smartphone chip business. Now theyre planning to buy Intel's smartphone SoC business for a fraction of the money they would've paid before. Nice strategy, but its somewhat unethical.
- savoytruffle 7y agoWhy do you say that? Everybody in the world is desperate to escape or evade Qualcomm's predatory monopoly.
- benj111 7y agoThey wanted to move away from Qualcomm because they were taking the piss. The problem was that the Intel chips were never that good so the were forced to settle with Qualcomm. It's a story of Intel being useless rather than Apple being evil.
- briandear 7y agoHow is it unethical? If you live in a village with two bakeries and one, your favorite, starts charging you double for their delicious bread, you then start shopping at the other one who’s bread is terrible, but suitable enough. Now, faced with competition, your favorite bakery lowers their price, so you go back to your favorite. Now, the second bakery is hanging on by a thread because you aren’t buying his bad bread. He decides to get out of the bakery business so he can use the money to invest in his roofing business instead. You see an opportunity to make even better bread than the best bakery, so you agree to buy the second bakery. Nothing unethical at all there. That’s exactly how free markets are supposed to work. The key point is that nobody forced Intel to make bad modems and nobody should be obligated to pay Qualcomm’s high prices. It isn’t Apple’s fault that Intel modems weren’t that good. It isn’t Apple’s fault they want to build something better than other market participants are currently providing.
- soup10 7y agoApple singlehandedly making multibillion dollar chip deals that make or break companies isn't "free market" for anyone but Apple.
- phenylene 7y agoCan someone explain why Intel was having such a hard time competing with Qualcomm? What are the challenges in developing modems?
- lnsru 7y agoOne needs to support all existing standards since 5G availability is limited in the world. This low power mixed circuit masterpiece requires really specific knowledge and must find balance between low power and good connectivity. It’s not trivial. Otherwise we would have couple startups every year trying to compete against Qualcomm. Last but not least: this matter involves thousands patents making it game for companies with very deep pockets only.
- ChuckNorris89 7y agoIntel's modem division was not exactly Intel, it was the modem business unit they bought from Infineon Semiconductors of Germany in 2011. Having worked in the semiconductor business in Germany and having friends who worked at Infineon there, the cause would be the corporate culture that rewards incompetent management riding the gravy train(old boys club) instead of engineering effort and playing the politics game is the only way to move up, even though lots of engineers there are very talented people. This, coupled with Intel's own innovation culture that fails at anything that doesn't involve milking the X86 resulted in a dumpster fire. Under Apple, these same engineers could probably ship something competitive if Apple plays their cards right.
- fapjacks 7y agoIt's too bad anything Apple manufactures is effectively taken completely off the market unless you are interested in buying the thing packaged inside of extremely expensive form factor.
- cpach 7y agoWell that’s vertical integration for ya. (Or is it horizontal? I always mix those two up due to some kind of spatial orientation hangup I have.)
- shmerl 7y agoApple getting more patents? What can go wrong.
- kennywinker 7y agoI don’t think apple has a particularly bad track record with abusing patents... they’ve used them in big ip battles with major competitors who also used patents against them, never to crush small innovators that I am aware of.
- shmerl 7y agoI think they are quite infamous in this regard, like going after rounded corners, "slide to unlock" and similar trivial ideas that not only have prior art, but shouldn't be even patentable to being with. So I don't have any trust in them not abusing any new patents. Small innovators are often simply too worried to enter some markets due to this. Because they don't have the arsenal of big competitors to fend off patent threats.
- kennywinker 7y agoDo you remember the early samsung galaxy phones? They were blatant ripoffs of all the original design apple was doing in the phone space. From the basic form factor down to small interactions. You can argue that slide-to-unlock should not be patentable (I agree) but if it is, using it to deter your largest competitor from cloning your product is actually what patents are supposed to be for... i.e. come up with your own solution don’t copy mine.
- shmerl 7y agoWhether they were a rip off or not, I won't argue (I use neither Samsung, nor Apple and I don't see such style aspects to be a required matter of exclusivity). But Apple didn't hesitate to attack using trivial (which means invalid) patents like that. The end doesn't justify the means. Just because they thought they were ripped off, doesn't excuse their abuse of the broken patent system. Next thing they can imagine they are being ripped off by some competitor, because they don't like the color of some device or what not. So why should anyone trust them not to do abuse the patent system, just because they can. I.e. I see any such abusive company arming themselves with even more patents like a very negative development.
- dbuder 7y agoI hate Qualcomm as much as the next guy, but if Intel can't get it to work, what makes Apple think they can?
- jillesvangurp 7y agoInteresting, Apple could do some interesting things with this. The qualcomm situation has resulted in a lot of stagnation in our industry. Companies like Apple are forced to work with them. But given their track record as being aggressive on the IP front (both sides), they have to spend a lot of effort engineering around this stuff. Companies like Intel, Qualcomm, Nokia own a lot of these patents and Apple has been paying them off for as long as the iPhone has been around. To this day there's not a single Apple laptop that ships with built in 4G modems even though that would make sense from a functional point of view. I suspect the reason is not technical but related to IP and pushback from other players in the ecosystem (e.g. operators). As soon as you add 4G/5G to the mix, there are suddenly a lot of sneaky patents that come into play. At least you can't tell me that nobody in Apple pondered the question "hmm I wonder which of our Mac Book Air customers would not like to be connected anywhere on this planet". The reason this is not a feature is that it would add a lot of cost related to patents and IP licensing. This deal might fix that partially. Software sims have been similarly difficult for the same reasons and another thing Apple has been pushing on lately. Apple doing this stuff in house means they can push harder on this front.
- tpetry 7y agoTheres really no great need in 4g for macbooks? I mean you can activate your wifis hotspot with handoff directly from your macbook without ever touching your iphone.
- ilogik 7y agoassuming you have an iphone, and it has plenty of battery...at one point after using the hotspot for a while my iphone showed a temperature warning, and I had to wait for it to cool off before I could use it again. Having the laptop battery and cooling would be much better
- toxik 7y agoAnd internet sharing makes a lot more sense FROM a computer to a handheld than vice versa
- pentae 7y agoThe irony that Apple really hate paying that royalty but expect App developers to do the exact same. Here's a fun anecdotal story. Me and my partner both have iPhone 7+ devices and the same carrier. I get 2 bars of 4G signal and she gets none inside our apartment. She has to walk outside to take calls. I couldn't understand how this was possible but after some research I discovered that my iPhone has a Qualcomm modem and hers has an Intel modem. Say what you want about Qualcomm but they make the best modem in the business. The reason I have not upgraded is quite simply because Apple no longer make a phone with a Qualcomm modem and I won't be able to get signal where I live. Obviously, i'm an edge case. But for the average person paying $1500 for the "Best smartphone in the world" it sure seems crazy that they're also getting the worst modem in the world packaged inside it so Apple can save a few dollars on the cost of the unit.
- judge2020 7y agoYou're probably in luck with the next iPhone after https://www.apple.com/newsroom/2019/04/qualcomm-and-apple-agree-to-drop-all-litigation/ https://www.apple.com/newsroom/2019/04/qualcomm-and-apple-ag...
- panpanna 7y agoNot to start a flamewar, but did it ever occur to her that there are other smartphone brands out there? (just trying to understand why people accept this sort of things)
- SomeOldThrow 7y agoIf the software is what matters (which certainly holds true for me), there's only one other smartphone brand.
- umvi 7y ago> it sure seems crazy that they're also getting the worst modem in the world packaged inside it so Apple can save a few dollars on the cost of the unit. A few dollars? Qualcomm skins you for all you are worth. Yeah, the actual chip is few bucks more, but the support framework for that chip is mega $$$. Want to debug the modem? Looks like you need Qualcomm's proprietary debug tool QXDM! That'll be $25K per year per seat. Oh and if you want their support (so you aren't flailing around with their gigabytes of generated logs) be prepared for another $200k annual support subscription per team. Want a certain document so you can figure it out yourself? $$$.
- dano 7y agoThis ties in nicely with Apple's new office in San Diego and the recruiting they're doing of Qualcomm employees.
- deleted 7y ago[deleted]
- pankajdoharey 7y agoIntel seems to become pointless in near future, AMD is cutting fast into desktop and server markets, Apple makes its own mobile chips and rest of the industry buys quallcoms chips. Soon Apple may drop Intel altogether from its laptops, and PC industry might follow the suite. What will Intel be doing in near future is quite worrisome. Intel should have pursued modem chips more effectively but their multi million dollar pay checks have to come from somewhere so they refuse to drop prices in any segment. Is Intel planning to shut shop in a few yrs?
- bristolppp1980 7y agoMy guess is this won't happen.