This deal is to fix the 5G flaw of the iPhone
| Reading time: 4 minutes
So far, Apple lacks a 5G chip for the iPhone – even the next generation will be without the future technology. Now, the iPhone maker has apparently found a long-term solution to the problem. The group found what it was looking for in Germany.
Apple is apparently preparing under pressure for his entry into the next and fifth mobile generation 5G. According to a report by the "Wall Street Journal" (WSJ), the iPhone manufacturer is about to take over the 5G modem division of chip manufacturer Intel. The newspaper relies on people familiar with the negotiations. The purchase price is a sum of at least one billion dollars for patents and personnel in the conversation.
For the next iPhone models, which are expected to be presented in September, the acquisition comes too late. According to information from WELT from circles of mobile operators, the next iPhone will not be 5G-capable, but in the LTE networks of the fourth generation mobile radio sparking 4G. Even the renowned analyst Ming-Chi Kuo assumes that Apple will come in the coming year with a 5G iPhone.
Intel had announced the sale of the fashion division in mid-April – just hours after Apple and Qualcomm had reached a surprising agreement in a year-long dispute over fashion patents. Part of the agreement was that Apple has made royalty payments to Qualcomm for more than six years, and has spent several years building modders from the San Diego chipmaker.
Intel had then announced to sell the division due to lack of economic success. He sees no way to operate profitably in the business with mobile modems, said Intel boss Bob Swan. Intel had taken over the mobile sector for 1.4 billion dollars from Infineon and already closed in 2015 various German sites, including in Ulm and Dresden. The headquarters of Intel Mobile Communications (IMC) with 3,500 employees worldwide is Munich-Neubiberg. According to external analysis, Intel has sunk over $ 17 billion in the mobile business since 2011, currently making IMC over two billion dollars loss per year.
Apple falls back at 5G
After Apple had jumped even the most important customer, Intel saw no future for the development of modem chips for devices. The situation is different with the 5G network infrastructure for the industrial Internet of Things that Intel intends to continue operating.
Apple was thereby indirectly responsible for the exit of Intel from the modem business, commented company boss Swan opposite the Wall Street Journal. According to Swan, he had no future for the expensive 5G research, after Apple had agreed with Qualcomm. Then he had canceled development and delivery of its own 5G modem chip, which was announced for 2020. The corresponding development project has been discontinued.
Whether the billion dollar deal also includes a patent package from Intel, which is currently up for auction, is not yet known – Intel holds more than 8000 patents around mobile modem technology, some of which were developed in-house, some were acquired by Infineon. The mere possession of these patents could facilitate Apple's upcoming negotiations on licenses for mobile chips with Qualcomm. Whether and when Apple resumes the 5G chip development in Germany and could revive the set project for a 5G modem, is still in the stars.
Apple falls behind in terms of 5G with his iPhone behind several competitors. Both Samsung and Huawei are already selling their first 5G smartphones. In Germany, Deutsche Telekom and Vodafone will launch their networks later this year with the Mate 20 X 5G from Huawei and the Galaxy S10 5G from Samsung. At the Mobile World Congress in February in Barcelona, several manufacturers had presented their 5G devices.
Apple is rarely one of the technological pioneers
What consequences the late 5G launch for Apple has, is unclear. The 5G networks are currently under construction. In Germany, 5G antennas can only be found at a few points. Vodafone was the first to launch 60 antennas. The Telekom wants to follow from October. Even in the next twelve months, this is unlikely to become a serious network.
In the US, the mobile phones are somewhat further, but here rely on very short-wave frequencies that are not used in Europe for 5G. This should make it even harder for smartphone manufacturers to introduce their devices worldwide for the 5G standard.
However, Apple is rarely one of the technological pioneers. The first iPhone introduced in 2007 was not even able to spark in the then popular 3G networks. Users had to settle for a very slow mobile Internet that ran above the GPRS and Edge standards. Only the next generation was then 3G-capable. The rise of the iPhone has not hurt this.
For Apple, a purchase price of one billion dollars would be easy to handle. After the group had returned large sums in the past few years on dividends and share repurchases to the investors, the Group at the end of March about 113 billion dollars in cash available.
So far, Apple was afraid of major acquisitions. The company buys annually up to 20 smaller companies that are easy to integrate. The largest acquisition so far was Beats Electronics, Apple paid in 2014 three billion euros.
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