Intel Abandons 5G Modem Development For Phones Following Apple And Qualcomm Truce

Intel 5G Modem
It looks as though the other shoe has dropped with followings Apple's surprise settlement with Qualcomm over patent licensing fees (as we predicted). Intel, which is currently the sole supplier of 4G LTE modems for Apple's current generation of iPhones and iPads, just announced that it is throwing in the towel on 5G modem development for smartphones.

Given that Apple is currently Intel's only customer for 4G LTE smartphone modems, and the company is already reportedly behind schedule with its first-generation 5G modem, the news of the Qualcomm settlement was probably just too much for Chipzilla to bear. Per the public details of the Apple-Qualcomm settlement, the two companies have entered into a six-year licensing agreement and multi-year chipset supply agreement. That would take a huge chunk out of Intel’s already razer-thin margins in the modem business.

roadmap 5g

In a statement, Intel said that it would fulfil its current contractual obligations with regards to 4G LTE modems for smartphones, but that its planned 2020 launch for its 5G modem has been axed. That means that we’ll never see the XMM 8160 5G multi-mode modem, which would be competing against Qualcomm’s second-generation Snapdragon X55 5G modem.

In addition to calling it quits on 5G modems for smartphones, Intel is also reassessing its commitment to 4G LTE and 5G modems for PCs and IoT devices. With that being said, Intel remains committed to supporting (and investing in) 5G network infrastructure going forward.

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“In the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

With Intel out of the 5G modem market for smartphones, that will leave Qualcomm as the sole supplier for future 5G-enabled iPhones. While 5G iPhones aren’t expected to arrive in 2019, it’s highly likely that Apple and Qualcomm’s rekindled relationship will make that transition happen in Fall 2020.