Apple Buys Intel Smartphone Modem Division for $1 Billion

Apple has agreed to buy the majority of Intel’s smartphone modem division, the companies announced on Thursday.

apple buys intel modem division

Intel was up more than 6% in after-hours trading. Apple stock was flat on the announcement.

2,200 Intel employees are joining Apple, according to the announcement. Apple paid $1 billion for employees, intellectual property and other equipment from Intel. The deal is expected to close in the fourth quarter of 2019.

Intel, on the other hand, will retain the ability to develop modems for non-smartphone applications. This means that going forward, Intel will still be able to develop modems, including the 5G modems for devices which includes personal computers, internet-of-things devices and autonomous vehicles.

"We have long respected Apple and we're confident they provide the right environment for this talented team and these important assets moving forward.

 We're looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers," Intel CEO Bob Swan said in a statement announcing the news.

 Apple rarely spends big bucks on acquring companies, focusing on small startups instead.

 The company had also been working on developing 5G modems for iPhones, which are not expected to hit the shelves until September 2020.

 Meanwhile, Apple too has been hiring engineers to develop modems in a bid to decrease its dependence on other companies and develop all the components in-house. The company already has a division that develops processors for Apple iPhones and iPads in-house.

 "Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they'll thrive in Apple's creative and dynamic environment.

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