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  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.
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.
That implies that Intel has the leverage. Intel's BATNA is to just let the modem IP rot. It's a sunk cost. They can just walk away from the negotiating table, and they'll be choosing to get $0 + ($small * potential of selling to anyone else = $ε) instead of $1B.
Apple's BATNA, meanwhile, is for Qualcomm to steamroll them and force them into expensive concessions across the board, and they're willing to pay through the nose to avoid that. Their choice is between $1B to intel and likely far more than $1B to Qualcomm.
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.
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.
This punishes users who want to replace their iPhone 7, since Apple simply doesn't make a good phone in that price bracket anymore.
A product is worth more than just the sum of its physical components. The quality of the apps, consistency of end user experience, integration with my other devices, multi-year support and yes commitment to privacy and security are worth $500 to me. And to hundreds of millions of other people.
Otherwise is a Rolex really worth that much more than a Seiko. Or how about a Ferrari versus the new Corvette.
That goes against everything Apple stands for; they will not give up control for any amount of money. The Qualcomm deal was really an emergency outlier.
Absolutely, it is. Of course, it's not the only point of competition, but if it were, I would still pay the additional amount to not be the product.
You think some ceos should be under a covenant that they can't acquire companies the same way that alcoholics shouldn't drink.
Apple has the best mobile processors. How does the Kirin 810 in the Honor 9X compare to Apple's A12 or the upcoming A13?
A month ago: https://news.ycombinator.com/item?id=20175583
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.
Qualcomm is pretty much an Intel of modem world. Their stuff is quite good, but their commercial terms are beyond a robbery, and you simply don't play in this space if you are a <100m company according to them.
Modems are no rocket science, and QCM made itself the juiciest target for Chinese.
If people have good memory here, at around 2012 Chinese company called Allwinner was steamrolling Qualcomm in its home field - application processors for mobile electronics.
Allwinner's only weak side was poor 3G integration, and they were about to finally solve it with their "phablet" solution with single package ram+soc+3rd party baseband combo.
Then, something strange happened: every mention of Phablet vanished from their website, and a month later they announced some vaguely termed "deal" with Qualcomm, after which a lot of their senior managers quit the company and left China for fancy life in the West...
There is a speculation in Shenzhen that they were basically bought off by Qualcomm.
Now with 5+ more contenders, I doubt they will be able to buy off all of them, especially when Huawei is involved.
I imagine the Chinese government also has an interest in not allowing the expertise to leave the country
For a currently-possible comparison scenario, are there issues with providers optimizing their networks for qualcom to the detriment of Samsung?
Edit: I suppose carriers are regional, so the iPhone might be the major revenue driver in the US, but Android can't be too far behind. Neglecting 40% of your userbase doesn't seem like good business.
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. 
Maybe this is what you were thinking about? If there is more, I’d be glad to hear about it!
I am sure.
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.
Even if they will use that portfolio purely defensively, it will be kind of useful for them
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.
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.
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.
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.