Daily Management Review

Apple negotiates buying 5G modems from Intel


Apple Inc. is actively negotiating with Intel Corp. about buying a modem business for smartphones. Amount of the possible deal is estimated at about $ 1 billion, writes The Wall Street Journal, citing informed sources.

According to them, an agreement can be concluded as early as next week unless negotiations stop. Sources claim that the parties have been discussing a possible deal for about a year.

The publication notes that the amount of $ 1 billion for such giants as Apple and Intel, is comparable to the "error in rounding." However, the transaction may have strategic and financial implications for Apple Inc. in the fight for leadership in introduction of 5G technology (the fifth generation of mobile communications).

So, a potential purchase will open Apple's access to Intel's many years of engineering development, which will save the company the years needed to create its own chips.

Intel, in turn, would get rid of unprofitable production. The newspaper’s source claims that the company is annually losing about $ 1 billion in smartphone development. Thus, Intel is ready to abandon this business, focusing on developing 5G technologies for other devices instead.

Apple and Intel have already negotiated this deal. The talks were suspended after Apple concluded an agreement on the supply of modems with Qualcomm, a competitor to Intel. However, negotiations of the parties soon resumed.

source: wsj.com