Update: Apple Confirms Intent To Buy Intel's Modem Business For $1 Billion

Apple and Qualcomm haven't exactly been the best of friends in recent years, but the former needs the latter's modems for its iPhones. The need for modem chips was part of the reason for the settlement reached between the two companies earlier this year that saw both dropping a number of lawsuits hurled at each other. However, A new report is making the rounds that claims that Apple will purchase Intel's modem business for $1 billion.

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Reports claim that Apple is "in advanced talks" to buy the Intel modem chip division within the next week. The source of the rumor comes from unnamed people who claim to be familiar with the negotiations cited by The Wall Street Journal. Apple made up with Qualcomm mostly because Intel was unable to deliver a 5G modem in a time frame that would allow Apple to launch a 5G iPhone.

The Intel modem segment purchase by Apple is a big deal as it would get the staff, patents, and research that Intel has built up over the last decade. Apple has been making a big push for years to bring as much of its production in-house as possible. One example of this is the SoC used inside the iPhone and iPad devices along with a lot of the supporting ICs. Rumors have also suggested that Apple might dump Intel and design its own ARM-based processors for future Macs.

Apple's purchase of the Intel modem business is certainly in rumor land for now, but Apple has the cash -- around $200+ billion -- for the transaction. Its first 5G iPhones have been rumored for a late 2020 launch. As smartphone sales are sagging, 5G devices are expected to drive a significant number of upgrades in the next few years.

Updated 7/25/2019 @ 4:18pm
Intel just announced today that Apple will acquire much of its modem business along with 2,220 employees and IP for a relatively bargain price of $1 billion. The transaction will close during Q4 2019.

"This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created," said Intel CEO Bob Swan. "We have long respected Apple and we're confident they provide the right environment for this talented team and these important assets moving forward. We're looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers."

"We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies. "Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they'll thrive in Apple's creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward."