Apple Held Talks with Intel About Acquiring its Smartphone-Modem Business
Citing people familiar with the matter, the Wall Street Journal is claiming that Apple held discussions with Intel in summer last year about acquiring parts of its smartphone-modem chip business, a potential deal that could accelerate Apple’s efforts to develop wireless technology for its future iPhones and iPads.
The talks reportedly continued for months before halting recently as Apple reached a multiyear supply agreement for modem chips from Qualcomm. The report adds that Intel is now exploring strategic alternatives for its modem chip business, including a possible sale to Apple.
The Intel-Apple talks, which haven’t been previously reported, reflect growing openness by the iPhone maker toward the idea of big acquisitions, people familiar with the company’s operations said. The talks also are part of broader tumult in the smartphone sector as sales growth has stalled, squeezing the iPhone business that has long driven Apple’s profits.
Sources say Intel has already received expressions of interest from a number of parties and has hired Goldman Sachs Group to manage the process. An acquisition would potentially yield a few billion dollars for the chip maker, sources added.
Asked in an interview whether Intel is considering selling the 5G smartphone modem business, Chief Executive Bob Swan said it is “evaluating alternatives on what’s the best course for our IP and our people.”
Earlier this week, Swan told the WSJ, “In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn’t see a path,” as its reasoning for exiting the business.