Apple is in its advanced stages of discussion to acquire chipmaker Intel’s modem chip business, according to several media reports. The acquisition would in fact allow Apple to take control of all primary components required to develop its devices.
The potential acquisition would comprise patents and staff at an estimated $1 billion valuation or more. For Intel, the deal would help the company dispose of its smartphone business that had been affecting it for a long time, resulting in a loss of $1 billion annually, The Wall Street Journal reported. However, Intel would continue working on 5G development for other devices.
With that, Apple will gain access to Intel’s robust engineering and talent network built in an effort to develop modern chips for 5G. Apple has anyway been working to develop custom cellular modem in-house for iPhones. Last year, a report from The Information said that the company was seeking a ‘cellular modem systems architect to work in its San Diego office’.
Apple has hired engineers from Intel as well and will establish an office of 1,200 employees in San Diego. Intel had announced its decision to quit the 5G smartphone business after Apple’s settlement with Qualcomm came through. Apple acquiring Intel would save the iPhone maker complex development work over a span of several years, media reports said.
The Wall Street Journal said that talks between Intel and Apple have been on and off for almost a year. Intel reasoned that it did not see enough profits in the smartphone division and will rather focus on data infrastructure.