Apple enters into a deal to purchase a portion of Intel (Topic)

Global giants Apple and Intel have agreed on a sale and purchase deal. Intel is selling part of its business to the "apple" corporation, as a result of which the latter will be able to produce its own processors Apple (including the newfangled 5G), without falling into a disadvantageous dependence on third-party manufacturers.

Trade Item

Subject to all agreements between the companies, Apple is buying part of Intel's modem division, which is related to the production of chips for smartphones. Apple acquires for itself everything related to intellectual assets in this area, including the development of protocols for the mobile communication standard, chip architecture, and patents for various technologies. In addition, Apple purchases the necessary equipment and conveyor belts to manufacture cellular modems. Also, under the terms of the deal, some of the employees of the modem division are transferred to the staff of the "apple" company.

The agreement between the companies, first of all, suggests that in the near future Apple smartphones will be equipped with branded modems. This includes the 5G standard, which according to preliminary data will appear in the iPhone next year. At the same time, the corporation itself gets the opportunity to create chips, focusing on its own requirements. And for Apple, an important factor is the acquisition of independence from other companies (yes, we are talking about Qualcomm), whose modems are now used in a number of iPhones.

For Intel, the deal, in addition to receiving a sum for the sale of modem production, means retaining part of the rights to its own developments in the field of cellular modems. So, the company retains its rights to produce mobile communication chips, which are intended for other classes of devices, except smartphones: desktops, laptops, industrial devices, and drones. Thus, Tim Cook's corporation only bought the rights to Apple processors for branded iPhones.

Main reason for the trade

Cooperation with Intel is directly related to the disagreements between Apple and another supplier of chips for branded iPhones - Qualcomm. The high-profile patent infringement proceedings, which began in 2017, reached their boiling point a year later. As a result, Qualcomm did not sell modems for the iPhone models XR, XS and XS Max - the 2018 line, and Apple had to look for a replacement, which became LTE chips from Intel. In addition, the Apple company continued to pay Qualcomm royalties for each branded smartphone that used a modem from that manufacturer.

In the spring of 2019, a truce was established between the companies, and at the same time it was reported that Intel intends to close its own project for the development and production of mobile chips with 5G technology. As it turned out later, this turned out to be a strategic move, since Intel and Apple had been negotiating a deal for at least a year and transferring part of the modem production to Tim Cook's company.

The Topic of Article: Apple enters into a deal to purchase a portion of Intel.
Author: Jake Pinkman