Hours after Apple announced a settlement with Qualcomm over intellectual property issues, Intel announced that it is canceling a line of 5G smartphone chips that were to be launched in 2020.
Qualcomm was the only supplier of wireless chips for smartphones to Apple. In light of the lawsuit, Apple encouraged Intel to expand its 4G wireless chip offerings in return for a significant share of its business.
Ars Technica
As the legal battle heated up, Intel became Apple’s sole supplier for 4G wireless chips in the iPhone. Intel was also working to develop 5G chips for Apple to use in future versions of the iPhone. Recent reports, however, indicated that Intel was “missing deadlines” for the wireless chip that was slated to go into the 2020 model of the iPhone.
Fast Company reported earlier this month that “in order to deliver big numbers of those modems in time for a September 2020 iPhone launch, Intel needs to deliver sample parts to Apple by early summer of this year, and then deliver a finished modem design in early 2020.”
Now that Apple and Qualcomm are once again able to work together, Intel can expect Qualcomm to supply at least some of the 5G chips in the 2020 iPhone—and Apple to have more leverage to negotiate better pricing.
“In the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” Intel CEO Bob Swan said in yesterday’s press release.
Intel says that it will honor existing contracts for the 4G smartphone chips and is re-assessing “opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices.” The company will, however, continue investing in 5G chips for network infrastructure.
