
Apple to acquire the majority of Intel's smartphone modem business - kennethfriedman
https://www.apple.com/newsroom/2019/07/apple-to-acquire-the-majority-of-intels-smartphone-modem-business/
======
ksec
Intel has a history of acquiring company and then sell it for less ( e.g
McAfee ). The Wireless Modem was acquired from Infineon in 2010 for $1.4B. It
had 3500 employees then, compared to only 2200 moving to Apple now along with
lots of Wireless patents that Intel has contributed to LTE and 5G NR over the
years. The $1B sounds like a very good deal.

My guess is that the recent Intel BaseBand modem design are worth very little
to Apple. It is based on Intel's 14nm ( and 10nm for the 8160 5G NR Modem ) ,
since Intel is winding down their Custom Foundry, and Apple has a much better
relationship with TSMC, the chance of Apple fabbing their Modem with Intel is
close to Zero. The last TSMC Intel Modem was Intel XMM 7480 used in iPhone 8 /
X.

But even if the Modem is literally worthless, I would have thought the patents
are worth a little more than $1B?

I am wondering if part of the deal is making sure Apple sticking to x86 and
Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM
or AMD Mac.

Edit: On another note. The Honor 9x [1] is selling in China for $280 VAT inc.
If that is $250 excl VAT, the iPhone XR selling at $750 is 3x the price. Apple
got a lot of explaining to do for the market to justify its price tag. And
privacy alone, which is what they are pushing is not enough.

[1] [https://www.anandtech.com/show/14667/honor-
unveils-9x-9x-pro...](https://www.anandtech.com/show/14667/honor-
unveils-9x-9x-pro-allview-display-kirin-810-48-mp-camera)

~~~
iamdead
> Apple got a lot of explaining to do for the market to justify its price tag.

If it were down to feature lists and price tags, Apple wouldn't be selling
very many phones. It seems Apple might be explaining itself in a way that
doesn't resonate with you, which is which is fine.

> I am wondering if part of the deal is making sure Apple sticking to x86 and
> Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM
> or AMD Mac.

I suspect that Apple had a lot of leverage in this negotiation, since they
were the main ones interested in using Intel's modems as leverage against
Qualcomm. So Intel's modems are more valuable to Apple than they are to other
players, including Intel. But I don't know anything.

~~~
ksec
>If it were down to feature lists and price tags, Apple wouldn't be selling
very many phones. It seems Apple might be explaining itself in a way that
doesn't resonate with you, which is which is fine.

I wish it was just the Internet, but increasingly I have had people
complaining about iPhone's prices in Real life, and they are not in the Tech
Circle. A few days ago the podcast from Macobserver on Apple's prices had a
section on it as well, more people are questioning the prices, especially when
they have something else to compare to.

I could paid double the price simply because of iOS. But 3x is a little hard,
and I cant explain to friends why is Apple so expensive either.

~~~
Steko
> 3x is a little hard, and I cant explain to friends why is Apple so expensive
> either.

How do you explain to them that Huawei's own P30 Pro sells for several times
what their Honor 9x sells for? Does Huawei need to explain that to the market
too? We've seen high spec midrange phones that sold for a fraction of flagship
prices for years but Apple has never attempted to go after that part of the
market.

And I imagine if you wanted to you could compile a long list of iphone selling
points besides privacy. For example, my wife's nearly two year old iphone 8
has a ST Geekbench score that's 50% higher than the Honor 9x (4228 vs 2832).
Maybe that's part of why Gazelle will pay more for her phone today ($289, 64
gb) than the 9x retails for.

------
dang
A couple days ago:
[https://news.ycombinator.com/item?id=20502437](https://news.ycombinator.com/item?id=20502437)

A month ago:
[https://news.ycombinator.com/item?id=20175583](https://news.ycombinator.com/item?id=20175583)

Related:
[https://news.ycombinator.com/item?id=20365415](https://news.ycombinator.com/item?id=20365415)

[https://news.ycombinator.com/item?id=19678498](https://news.ycombinator.com/item?id=19678498)

------
lyttlerock
According to Intel's latest quarterly report[1], 2,200 employees is ~2% of
their entire employee base. Kinda reminds me how massive these companies are.

[1] [https://www.intc.com/investor-relations/investor-
education-a...](https://www.intc.com/investor-relations/investor-education-
and-news/investor-news/press-release-details/2019/Intel-Reports-First-
Quarter-2019-Financial-Results/default.aspx)

------
sanguy
Apple has a pattern here. Started with CPU's (PA Semi) and moved into flash
controllers (AnoBit), GPS (coherent), GPU's (Imagine Tech), and now cellular
modems. The prior have been well integrated to give us the latest Axx designs.

It's only a matter of time for the cellular modem to be integrated tightly as
Apple takes it in house.

Qualcomm will be pushed out; it is only a matter of time now. Not if; but
simply when.

------
duxup
It worries me that this effectively ends up behind the Apple wall and everyone
else is stuck with the status quo.

~~~
dstaley
This is, by far, my biggest concern with this acquisition. In markets where
the iPhone is the major revenue driver, what incentive will carriers have to
optimize their network for non-iPhone modems? I can easily see the US carriers
neglecting Qualcomm modems to the point where if you want the best cellular
experience, you have to use an iPhone.

~~~
Skunkleton
A very large number of non-apple cell phones are sold in the US. This doesn't
seem like a well founded fear.

~~~
scarface74
Not a large number of high end non Apple phones....

~~~
nradov
Samsung sells huge volumes of high end phones.

~~~
scarface74
The average selling price of Samsung’s phones is $235.
([https://www.sammobile.com/2017/08/02/average-selling-
price-s...](https://www.sammobile.com/2017/08/02/average-selling-price-
samsungs-phones-go-thanks-galaxy-s8/)). Most of their phones are low end.

~~~
pessimizer
An average selling price doesn't speak to whether they ship a huge number of
high end phones, just that if they do, they ship far more low end phones.

~~~
scarface74
Samsung ships about twice the number of phones as Apple but has a third of the
ASP. The conclusion that most Samsung phones are low end is not hard to reach.

------
ChuckNorris89
With this aquisition, this will be apple's second or third office in Munich.

~~~
lnsru
I am really glad, these engineers kept their jobs. More interesting is that
Munich has similar sized offices of Apple and Qualcomm now. Their topics’s
aren’t really overlapping, but the roots of both companies lie in Siemens.
Maybe this also hinders their global success.

~~~
currysausage
I can’t find anything about Qualcomm having Siemens roots. Are you sure about
that?

Qualcomm bought some BenQ Mobile (ex-Siemens) patents from HP (Palm), but
according to Jobs, these were rather worthless:

 _Just for the record, when Siemens sold their handset business to BenQ they
didn’t sell them their essential patents but rather just gave them a license.
The patents they did sell to BenQ are not that great. We looked at them
ourselves when they were for sale. I guess you guys felt differently and
bought them. We are not concerned about them at all._ [1]

Maybe this is what you were thinking about? If there is more, I’d be glad to
hear about it!

[1] [http://www.project-disco.org/competition/012313-patent-
bully...](http://www.project-disco.org/competition/012313-patent-bully-steve-
jobs-unethical-use-of-patents-45773/)

~~~
lnsru
rf360jv.com

I am sure.

~~~
currysausage
So Siemens > EPCOS > TDK > Qualcomm/TDK (RF360 Joint Venture)? That is super
interesting, thank you!

------
baybal2
More than a modem, they also get a gigantic patent portfolio to fight off
Qualcomm's trolling

~~~
mythz
With the massive settlement with QCOM, Apple's given themselves 6 years to try
and develop competing chips which Intel wasn't capable of after many years and
multi billion R&D investments. Given they're going to continue using Intel's
existing 2,200 staff it's not clear what Apple can bring to the table other
than a bigger R&D budget, perhaps they can eek out an edge with their tighter
h/w + s/w integration. But as they're taking over the development they must
think they can or at least use it as a bargaining chip for more favorable
licensing from QCOM.

From a company health and security perspective it makes sense for a company as
large as Apple to try and not be beholden to an external company for core
technology, so from that perspective given the investment is a rounding error
for Apple they might as well continue trying to compete.

~~~
nicoburns
Apple can probably bring much better high-level management than Intel. Intel
haven't managed to make a success of _anything_ except x86 processors, whereas
Apple do well in markets they target more often than not...

------
MrVitaliy
Is Apple finally going to build significant presence in Silicon Forest?

------
lawnchair_larry
Considering how awful Intel modems are, this is disappointing. I was hoping
they would stick with Qualcomm.

~~~
Traster
It is going to be absolutely amazing if Apple manages to turn around what has
essentially been a failing business for the last 10 years.

~~~
amluto
Apple has two major things going for it IMO:

First, they have a huge buyer: themselves. This also means they can closely
integrate with the AP and driver folks.

Second, Apple is not Intel. Intel is famously quite bad at managing the
development of anything that isn’t a CPU. Apple (or, frankly, basically anyone
else) may be able to fix the cultural issues that make it impossible for Intel
to build a reasonable non-CPU product.

~~~
tenebrisalietum
Aren't Intel NICs considered the best, due to the way it manages interrupts
(can't remember the source at the moment but I did read somewhere they were
better than RealTek but maybe not necessarily Broadcom)?

Also every Intel motherboard of course has an Intel-developed chipset.

Didn't Intel also develop HDCP which is also in every television and graphics
card at this point - though I'm not sure what Intel hardware is behind that.

~~~
amluto
Intel NICs are indeed good. I suppose that an exception. I don’t know much of
the history behind HDCP, but the crypto is a joke.

Interesting things to look up: SoFIA, Puma 6, all the Atom-based phones out
there, Larrabee / Xeon Phi. A lot of money has been spend, and the returns
have been dubious.

------
elsonrodriguez
So basically Apple gets Qualcomm to agree to a settlement for all their
lawsuits, then Apple buys Intel's modem business once there's no legal
ramifications.

I'd be willing to bet Apple dumps Qualcomm at soon as the multi-year deal is
up in favor of their in-house chips.

Well played.

