Chipmaker reassesses 5G strategy and product options after settlement of Apple-Qualcomm lawsuit
Intel is pulling out of the 5G smartphone modem segment and is reassessing its 5G strategy following the settlement of the patent infringement lawsuit that clears the way for Qualcomm to have greater sway in the 5G mobility market.
The Lowdown: Intel says it will fulfill current commitments for 5G smartphone modems, but will not proceed with a new product launch schedule for 2020 and will discontinue current products at the conclusion of contractual obligations. It plans to focus more efforts on its 5G enterprise business opportunities, which include the enablement of Internet of Things (IoT) devices. However, Intel also says it will complete an assessment of its 4G and 5G modem opportunities in PCs, IoT, and data center products. Intel will provide further details on its 5G strategies during its next earnings call, scheduled for April 25.
The Details: Intel’s decision to withdraw from the 5G smartphone modem market came as Apple and Qualcomm settled a patent infringement lawsuit. The six-year deal licenses Qualcomm technology to Apple, includes a payment by Apple to Qualcomm for previous technology use, and cleans up supply-chain issues related to contract manufacturers.
The Impact: Qualcomm coming to terms with Apple means that its relationship with the world’s second-largest smartphone company is clear. Intel’s decision to pull out of the smartphone market means Qualcomm will dominate 5G mobility.
The Buzz: “We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”