Apple announced a few hours ago the acquisition of much of Intel’s smartphone modem business for $1 billion.
The agreement includes a portfolio of 8,500 patents and 2,200 Intel employees. That patent portfolio is one of the key elements of that acquisition, and it remains to be seen whether Apple will be able to develop competitive chips in a market dominated by Qualcomm. Intel, meanwhile, is letting slip another mobile segment in which it never succeeded.
There are two distinct parts to this strategic acquisition. The first one, the 5G patents. The second is the technology and talent that Apple has bought with those 1,000 million dollars.
This portfolio of patents – some 8,500 related to the field of mobility, in addition to another 8,500 that they already had – looks to the short term and allows Apple to defend itself against possible legal threats when developing products that use this technology; this catalogue of patents is a powerful defensive weapon.
It is especially so considering that legal battles for patents are very frequent in the United States and there are those who foresee potential attacks by companies like Huawei which owns 15% of the existing 5G patents.
The second part of the agreement, which focuses on the technology and the employees who develop those modems, looks more to the future in the medium and long term. It’s the key to getting the firm to design modems that compete with Qualcomm’s, something they’re unlikely to do soon but certainly have the resources to do in a period experts say will be less than five years.
In fact, the agreement that Apple has reached with Qualcomm, for which it has paid 4.7 billion dollars, allows it to license and use its 5G modems for the next 6 or 8 years, more than enough margin to be able to develop competitive chips.