The deal, which had been rumoured for weeks, follows Intel's announcement from April about it planning to exit the 5G mobile modem business. Intel made that revelation shortly after Apple reached a sudden settlement with Qualcomm, which allowed Apple to return to using Qualcomm’s modems. Intel CEO Bob Swan later said Intel dropped its modem business because of the settlement.
Bloomberg previously claimed Apple thought Intel couldn't deliver 5G modems for a 5G-ready iPhone soon enough, so it made friends with Qualcomm. Then, Intel reportedly began searching for a buyer. But, now that Apple is buying up Intel’s phone modem business, including 2,200 Intel employees, as well as IP and equipment, it's looking like Apple won't have to be as nice to Qualcomm.
The transaction is expected to close toward the end of the year, and it means Apple will be able to produce its own 5G modems for its smartphones, instead of getting them from Qualcomm. Bloomberg is speculating Apple’s in-house modems could be ready in three years.
Now, remember, Intel had become a third-party modem provider for the 2018 iPhone models, so this acquisition isn't exactly out of left-field. Also, it's worth noting some reports claim that Qualcomm’s hardware offers higher speeds than Intel’s hardware. PCMag even reported in 2017 that the Qualcomm-powered iPhone X had better LTE performance than Intel models.
But Apple has been reportedly working on its own modems for a while, with job listings popping up last year that suggested it was developing new networking hardware in its Santa Clara and San Diego offices, which also happens to be the global headquarters of Qualcomm.
It'll be interesting to see how Qualcomm responds to this Apple-Intel deal now that it's official. We'll keep you posted.