Just hours after Apple’s settlement with Qualcomm, Intel has announced that it is exiting the 5G smartphone modem business. In a press release, the company says that it will instead focus on 5G network infrastructure.
Intel says that it will “complete an assessment” of the opportunities for 4G and 5G modems in PCs, internet of things devices, and other data-centric devices. It will also continue to “meet current customer commitments” for its existing 4G smartphone modem efforts – such as the iPhone.
Going forward, however, Intel says it does not expect to launch 5G modem products for smartphones, including those originally planned for 2020:
Intel Corporation today announced its intention to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices. Intel will also continue to invest in its 5G network infrastructure business.
The company will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020.
Intel CEO Bob Swan said that it is clear there is no “path to profitability and positive returns” for Intel in the smartphone modem business:
“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan.
“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”
Apple was widely expected to use Intel’s 5G modems with the iPhone starting in 2020. A report recently suggested that Intel was struggling to meet deadlines and risked missing the iPhone’s 2020 window. The report elaborated on the strain the modem business put on Intel, noting that data infrastructure and other businesses are more profitable for the company.
Apple is now expected to use Qualcomm’s 5G modems with the iPhone in 2020. It now seems as if Intel bailed out of the modem business, forcing Apple to make a decision in its legal battle with Qualcomm.
Read the full press release from Intel here.