The fruity cargo cult has written a billion dollar cheque for the majority of Intel's modem business including its 2,200 staff. The deal includes IP, equipment, leases and Sag said the deal was destined to be, from the very day that Apple announced Intel would be its modem supplier of choice.
Intel struggled to compete with the likes of Qualcomm, and delays eventually led Apple to switch suppliers back to Qualcomm which took away Intel’s biggest and most significant modem customer and they’re lucky to have gotten at least something for their efforts.
Writing in Forbes, Sag said that Apple has wanted to build its own modems for a long time. Apple’s entire chip business is predicated on integration and cost optimisation. Apple owns the operating system and it owns the SoC, so why shouldn’t it also own the modem? Its biggest silicon competitor is Qualcomm, which already integrates its modems into its Snapdragon SoCs. Apple loves to do things in-house and if it can, it will. Modems are just the next step on Apple’s journey to integration, albeit perhaps one of the most expensive and complex steps to date.
Intel’s biggest push on modems really began last year when it announced it would spin up a 1,000+ person 5G modem division in San Diego. That was increased to 1,200 people earlier this year, announced days before Apple’s now settled lawsuit with Qualcomm began in San Diego.
Sag thinks that Apple will continue to expand and hire. Apple acquired Intel’s modem business because it would have taken it a minimum of five to 10 years to build a modem business of its own from scratch. With Intel’s teams and IP, it can likely shorten the time to three to five years for a top-to-bottom Apple design. He thinks Apple will build a SoC with a built-in modem within that timeframe. Apple likely isn’t married to Intel’s fabs, it can probably go with its already TSMC-optimised SoC designs and manufacture a chip with a modem inside with fewer problems.
Apple still has a modem supply and licensing agreement with Qualcomm. Sag said that Apple will work diligently to build a 5G modem that caters exactly to its future needs, which can be integrated into all of its custom SoC designs and give it complete control of connectivity.
"There is also a significant amount of RF design for 5G that needs to be accounted for, especially with mmWave. Many have struggled with this, including Intel. RF gets more complex with 5G since you’re dealing with even more types of bands, bigger bandwidths, and eventually supporting both mmWave and Sub-6 5G concurrently. RF is hard, and that’s part of the reason Qualcomm has been able to keep its leadership position for so long", Sag wrote.
In the long term though the world will suffer becuase of Intel getting out of the modem business. Intel’s lack of cellular connectivity is a weak point for Qualcomm to attack.
Sag thinks other ARM vendors will join Microsoft Always Connected PC initiative, and Chipzilla will have a harder time competing with these devices if it doesn’t have a modem. While it could do something similar with Wi-Fi, LTE and 5G connectivity are going to absolutely be necessary for personal computing devices in the future. It’s not a matter of if, but when.
