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by Jason Snell & Dan Moren

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Linked by Jason Snell

WSJ: Apple planning to buy Intel’s modem business

Dana Cimilluca, Cara Lombardo and Tripp Mickle of The Wall Street Journal report that Apple and Intel are discussing a $1 billion transaction that would give Apple ownership of Intel’s (abandoned) modem business, including intellectual property:

It would give Apple access to engineering work and talent behind Intel’s yearslong push to develop modem chips for the crucial next generation of wireless technology known as 5G, potentially saving years of development work. Apple has been working to develop chips to further differentiate its devices as smartphone sales plateau globally, squeezing the iPhone business that has long underpinned its profits. It has hired engineers, including some from Intel, and announced plans for an office of 1,200 employees in San Diego.

This has been the source of outside speculation for a while now, ever since Apple announced it was switching to Qualcomm for 5G modem chips and Intel simultaneously announced it was getting out of the modem business.

It seems like Intel’s new CEO didn’t have interest in being in this business, and Apple is reportedly staffing up a major effort to build its own modem chips in the long term. So, at least from this outside perspective, this transaction seems to make an enormous amount of sense.