Intel has a history of acquiring company and then sell it for less ( e.g McAfee ). The Wireless Modem was acquired from Infineon in 2010 for $1.4B. It had 3500 employees then, compared to only 2200 moving to Apple now along with lots of Wireless patents that Intel has contributed to LTE and 5G NR over the years. The $1B sounds like a very good deal.
My guess is that the recent Intel BaseBand modem design are worth very little to Apple. It is based on Intel's 14nm ( and 10nm for the 8160 5G NR Modem ) , since Intel is winding down their Custom Foundry, and Apple has a much better relationship with TSMC, the chance of Apple fabbing their Modem with Intel is close to Zero. The last TSMC Intel Modem was Intel XMM 7480 used in iPhone 8 / X.
But even if the Modem is literally worthless, I would have thought the patents are worth a little more than $1B?
I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.
Edit: On another note. The Honor 9x [1] is selling in China for $280 VAT inc. If that is $250 excl VAT, the iPhone XR selling at $750 is 3x the price. Apple got a lot of explaining to do for the market to justify its price tag. And privacy alone, which is what they are pushing is not enough.
> Apple got a lot of explaining to do for the market to justify its price tag.
If it were down to feature lists and price tags, Apple wouldn't be selling very many phones. It seems Apple might be explaining itself in a way that doesn't resonate with you, which is which is fine.
> I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.
I suspect that Apple had a lot of leverage in this negotiation, since they were the main ones interested in using Intel's modems as leverage against Qualcomm. So Intel's modems are more valuable to Apple than they are to other players, including Intel. But I don't know anything.
A product is worth more than just the sum of its physical components. The quality of the apps, consistency of end user experience, integration with my other devices, multi-year support and yes commitment to privacy and security are worth $500 to me. And to hundreds of millions of other people.
Otherwise is a Rolex really worth that much more than a Seiko. Or how about a Ferrari versus the new Corvette.
I am wondering if part of the deal is making sure Apple sticking to x86 and specifically Intel's x86 CPU on the Mac
That goes against everything Apple stands for; they will not give up control for any amount of money. The Qualcomm deal was really an emergency outlier.
According to Intel's latest quarterly report[1], 2,200 employees is ~2% of their entire employee base. Kinda reminds me how massive these companies are.
Apple has a pattern here. Started with CPU's (PA Semi) and moved into flash controllers (AnoBit), GPS (coherent), GPU's (Imagine Tech), and now cellular modems. The prior have been well integrated to give us the latest Axx designs.
It's only a matter of time for the cellular modem to be integrated tightly as Apple takes it in house.
Qualcomm will be pushed out; it is only a matter of time now. Not if; but simply when.
The alternative is Intel dissolving their R&D completely since they couldn't see how the division could ever be profitable. At least with Apple acquiring them there's still some competition left in the field.
There are 5 or more independent modem developers in China. If you add to that that 5G was mostly a Chinese thing, I can confidently say that at least in 5G space, Qualcomm is nowhere near a monopolist now.
Qualcomm is pretty much an Intel of modem world. Their stuff is quite good, but their commercial terms are beyond a robbery, and you simply don't play in this space if you are a <100m company according to them.
Modems are no rocket science, and QCM made itself the juiciest target for Chinese.
If people have good memory here, at around 2012 Chinese company called Allwinner was steamrolling Qualcomm in its home field - application processors for mobile electronics.
Allwinner's only weak side was poor 3G integration, and they were about to finally solve it with their "phablet" solution with single package ram+soc+3rd party baseband combo.
Then, something strange happened: every mention of Phablet vanished from their website, and a month later they announced some vaguely termed "deal" with Qualcomm, after which a lot of their senior managers quit the company and left China for fancy life in the West...
There is a speculation in Shenzhen that they were basically bought off by Qualcomm.
Now with 5+ more contenders, I doubt they will be able to buy off all of them, especially when Huawei is involved.
This is, by far, my biggest concern with this acquisition. In markets where the iPhone is the major revenue driver, what incentive will carriers have to optimize their network for non-iPhone modems? I can easily see the US carriers neglecting Qualcomm modems to the point where if you want the best cellular experience, you have to use an iPhone.
If Apple brought the design/implementation of their modems in house, as they have with much of their chipset design, and as a result Intel ceased pursuing the modem business, because they'd lost their biggest customer, would your concerns be the same?
Yeah, I mean I'm happy there may still be another player in the 5g space, but it's really really unlikely Apple will turn OEM and provide market competition the way Intel might have.
Here's to hoping this succeeds and Apple spins off the company to meet the demand of other manufacturers, similar to how it was involved with founding ARM Holdings.
I am really glad, these engineers kept their jobs. More interesting is that Munich has similar sized offices of Apple and Qualcomm now. Their topics’s aren’t really overlapping, but the roots of both companies lie in Siemens. Maybe this also hinders their global success.
With the massive settlement with QCOM, Apple's given themselves 6 years to try and develop competing chips which Intel wasn't capable of after many years and multi billion R&D investments. Given they're going to continue using Intel's existing 2,200 staff it's not clear what Apple can bring to the table other than a bigger R&D budget, perhaps they can eek out an edge with their tighter h/w + s/w integration. But as they're taking over the development they must think they can or at least use it as a bargaining chip for more favorable licensing from QCOM.
From a company health and security perspective it makes sense for a company as large as Apple to try and not be beholden to an external company for core technology, so from that perspective given the investment is a rounding error for Apple they might as well continue trying to compete.
I think the issue was more than Intel was running behind on their roadmap, unable to deliver on the promised schedule. This is what drove the Apple-Qualcomm settlement. But that settlement gives Apple years to work with this acquisition to bring it to "good enough". And their experience in chip design thus far has shown they can shepherd chips through design and implementation that are more than just "good enough".
So basically Apple gets Qualcomm to agree to a settlement for all their lawsuits, then Apple buys Intel's modem business once there's no legal ramifications.
I'd be willing to bet Apple dumps Qualcomm at soon as the multi-year deal is up in favor of their in-house chips.
[+] [-] ksec|6 years ago|reply
My guess is that the recent Intel BaseBand modem design are worth very little to Apple. It is based on Intel's 14nm ( and 10nm for the 8160 5G NR Modem ) , since Intel is winding down their Custom Foundry, and Apple has a much better relationship with TSMC, the chance of Apple fabbing their Modem with Intel is close to Zero. The last TSMC Intel Modem was Intel XMM 7480 used in iPhone 8 / X.
But even if the Modem is literally worthless, I would have thought the patents are worth a little more than $1B?
I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.
Edit: On another note. The Honor 9x [1] is selling in China for $280 VAT inc. If that is $250 excl VAT, the iPhone XR selling at $750 is 3x the price. Apple got a lot of explaining to do for the market to justify its price tag. And privacy alone, which is what they are pushing is not enough.
[1] https://www.anandtech.com/show/14667/honor-unveils-9x-9x-pro...
[+] [-] iamdead|6 years ago|reply
If it were down to feature lists and price tags, Apple wouldn't be selling very many phones. It seems Apple might be explaining itself in a way that doesn't resonate with you, which is which is fine.
> I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.
I suspect that Apple had a lot of leverage in this negotiation, since they were the main ones interested in using Intel's modems as leverage against Qualcomm. So Intel's modems are more valuable to Apple than they are to other players, including Intel. But I don't know anything.
[+] [-] threeseed|6 years ago|reply
A product is worth more than just the sum of its physical components. The quality of the apps, consistency of end user experience, integration with my other devices, multi-year support and yes commitment to privacy and security are worth $500 to me. And to hundreds of millions of other people.
Otherwise is a Rolex really worth that much more than a Seiko. Or how about a Ferrari versus the new Corvette.
[+] [-] wmf|6 years ago|reply
That goes against everything Apple stands for; they will not give up control for any amount of money. The Qualcomm deal was really an emergency outlier.
[+] [-] jen20|6 years ago|reply
Absolutely, it is. Of course, it's not the only point of competition, but if it were, I would still pay the additional amount to not be the product.
[+] [-] PaulHoule|6 years ago|reply
You think some ceos should be under a covenant that they can't acquire companies the same way that alcoholics shouldn't drink.
[+] [-] clouddrover|6 years ago|reply
Apple has the best mobile processors. How does the Kirin 810 in the Honor 9X compare to Apple's A12 or the upcoming A13?
[+] [-] dang|6 years ago|reply
A month ago: https://news.ycombinator.com/item?id=20175583
Related: https://news.ycombinator.com/item?id=20365415
https://news.ycombinator.com/item?id=19678498
[+] [-] lyttlerock|6 years ago|reply
[1] https://www.intc.com/investor-relations/investor-education-a...
[+] [-] sanguy|6 years ago|reply
It's only a matter of time for the cellular modem to be integrated tightly as Apple takes it in house.
Qualcomm will be pushed out; it is only a matter of time now. Not if; but simply when.
[+] [-] duxup|6 years ago|reply
[+] [-] mythz|6 years ago|reply
[+] [-] baybal2|6 years ago|reply
Qualcomm is pretty much an Intel of modem world. Their stuff is quite good, but their commercial terms are beyond a robbery, and you simply don't play in this space if you are a <100m company according to them.
Modems are no rocket science, and QCM made itself the juiciest target for Chinese.
If people have good memory here, at around 2012 Chinese company called Allwinner was steamrolling Qualcomm in its home field - application processors for mobile electronics.
Allwinner's only weak side was poor 3G integration, and they were about to finally solve it with their "phablet" solution with single package ram+soc+3rd party baseband combo.
Then, something strange happened: every mention of Phablet vanished from their website, and a month later they announced some vaguely termed "deal" with Qualcomm, after which a lot of their senior managers quit the company and left China for fancy life in the West...
There is a speculation in Shenzhen that they were basically bought off by Qualcomm.
Now with 5+ more contenders, I doubt they will be able to buy off all of them, especially when Huawei is involved.
[+] [-] dstaley|6 years ago|reply
[+] [-] tptacek|6 years ago|reply
[+] [-] ineedasername|6 years ago|reply
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[+] [-] ChuckNorris89|6 years ago|reply
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[+] [-] baybal2|6 years ago|reply
[+] [-] mythz|6 years ago|reply
From a company health and security perspective it makes sense for a company as large as Apple to try and not be beholden to an external company for core technology, so from that perspective given the investment is a rounding error for Apple they might as well continue trying to compete.
[+] [-] mudil|6 years ago|reply
[+] [-] MrVitaliy|6 years ago|reply
[+] [-] lawnchair_larry|6 years ago|reply
[+] [-] Skunkleton|6 years ago|reply
[+] [-] Traster|6 years ago|reply
[+] [-] ineedasername|6 years ago|reply
[+] [-] scarface74|6 years ago|reply
[+] [-] elsonrodriguez|6 years ago|reply
I'd be willing to bet Apple dumps Qualcomm at soon as the multi-year deal is up in favor of their in-house chips.
Well played.