Apple’s spending $1 billion to buy most of Intel’s 5G modem business

The technology and people it’s acquiring will reinforce its push into 5G wireless services

The news: The colossus of Cupertino is buying most of Intel’s modem activities. The deal will see Intel exit a business where it was a relative minnow compared with rivals like Qualcomm, whose modems are still used in most models of Apple’s iPhone. Intel had announced its intention to sell earlier this year.

What’s Apple getting? In addition to 2,200 Intel employees who work in the firm’s modem business, Apple will also inherit a treasure chest of over 17,000 wireless technology patents covering everything from modem architectures to cellular standards. Intel will still be able to work on 5G modems, but not ones designed for smartphones.

But why own the tech? It’s worth remembering Apple is still smarting from a long-running legal dispute with Qualcomm over royalty payments and alleged patent infringements linked to the chipmaker’s modem technology. During that legal tussle, Apple turned to Intel for modems.

The lawsuit was settled in April, and Apple agreed to a six-year licensing deal with Qualcomm as part of the peace deal. But by buying Intel’s business, it’s sending a clear signal to Qualcomm that it has its own backup in the event of another dispute.

What’s it mean for my iPhone? Not a lot right now, as those released over the next few years will mainly use Qualcomm’s wireless technology because of the legal settlement. But Apple loves to tinker with the tech underneath its shiny screens, so expect it to come up with novel ideas for refining modems in the future. And expect it to keep the best ones under wraps for, oh, say about six years.