Intel Kills 5G Modem Plans

Posted on April 17, 2019 by Paul Thurrott in Apple, Hardware, Mobile with 36 Comments

In the wake of Apple’s blockbuster settlement—read: defeat—in its Qualcomm patent case, Intel has thrown in the towel on its 5G modem plans.

“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,” Intel CEO Bob Swan said in a prepared statement. “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.”

Yikes.

Intel’s inability to compete in mobile has been a long-time concern, but its inability to create competitive modems, and 5G modems in particular, has many wondering if the chip-making giant even has a future.

Apple selected Intel has an alternative supplier of 4G/LTE modems to Qualcomm for its iPhones, but it infamously had to slow down the Qualcomm parts to match the less-competitive performance of the Intel modems. Since then, Apple unsuccessfully tried to sue Qualcomm into even better licensing terms—the firm already paid less than all of Qualcomm’s other customers for modems—and was forced to use Intel parts exclusively. The results have been disastrous and led to this week’s blockbuster settlement with Qualcomm because Intel’s 5G parts kept getting delayed into the distant future.

Intel’s decision to “exit the 5G smartphone modem business” comes right on the heels of that settlement, and helps explain, I think, why Apple did settle: The Intel 5G parts weren’t just late, they might never have arrived in a viable form. Intel, which was once the world’s biggest maker of microprocessors by volume, is simply inept when it comes to competing in mobile, a market that overtook the PC years ago.

Tagged with ,

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (36)

36 responses to “Intel Kills 5G Modem Plans”

  1. Avatar

    HellcatM

    apple is really bad for tech. Bullying companies with law suites to get their way. How do they get away with this?

    • Avatar

      Bob2000

      In reply to HellcatM:

      They didn't, Apple blinked, Qualcomm won.


      Qualcomm also has a massive number of patents so any ideas Apple has of building a 5G modem/radio that can match Qualcomm is very difficult to make a reality.


      Intel couldn't deliver on 5G so Apple swallowed it's pride and settled with Qualcomm. Without Apple Intel has no customers for it's 5G development program.

  2. Avatar

    Chris Payne

    Sheezus. Is this an article about Intel or about how horrible Apple is?


    First sentence: Apple's "defeat," even though Paul has no idea of the terms of their settlement.


    Paragraph 5: "Apple unsuccessfully tried to sue." Again, Paul has no idea what the settlement was. Also: Apple's use of intel parts has been disastrous. How so, exactly?


    The fact is that Apple owed Qualcomm money, regardless of the lawsuit. For all we know, the settlement is simply that Apple paid the amount they already owed. Or, they could have possibly paid a lesser amount, and promised Qualcomm a longer contract term than they (Qualcomm) originally wanted. Or maybe exclusivity.


    Who knows?


    This is horrible slanted reporting. How about talking about how Intel's announcement affects other companies? Or how it may impact their employee base (are there layoffs)? Or about Intel's plans to continue 5G development in other areas of their business?


    Why does Paul hate Apple so much?

    • Avatar

      lvthunder

      In reply to unkinected:

      Yes, Paul hates Apple more then anything else I can think of. You have to take that into account when you read articles about Apple here. It's not even the devices themselves as much, but it is the people who work at Apple that he hates.

    • Avatar

      MikeCerm

      In reply to unkinected:

      Qualcomm's stock shot up by about 40% after the settlement was announced. If that doesn't tell you who the winner here is, then I don't know what to tell you. Previously, Apple was able to get Qualcomm and Intel to bid against each other. Now that Qualcomm has a de facto monopoly, they can charge Apple whatever they want, and Apple will have no choice but to pay it. Or they can switch to Snapdragon CPUs, and get the modems for "free."

      • Avatar

        lvthunder

        In reply to MikeCerm:

        That tells you Qualcomm won, but it doesn't necessarily mean Apple lost. A settlement is typically a win for both sides.

      • Avatar

        Greg Green

        In reply to MikeCerm:

        That means going through the court process was a worse alternative, meaning Qualcomm had a significant chance of losing.

        • Avatar

          Chris Payne

          In reply to Greg Green:

          Right, and most people, I think, assumed Qualcomm would come out the loser in a court battle, so this was viewed as very good news for them. If you think the general stock market had any idea what the terms of the settlement were and that's why Qualcomm shot up but Apple didn't, you're sadly mistaken.


          Also, MikeCerm, keep in mind FRAND terms for market leaders. Qualcomm cannot charge "whatever they want" because they own these necessary patents. If I was a conspiracy theorist, I could imagine that Apple forced intel to quit 5G and pushed everything into Qualcomm's hands JUST to get better terms, as Qualcomm would come under monopoly laws. Then again, I'm not a conspiracy theorist. :)

  3. Avatar

    red.radar

    I think the CEO at Intel is going to be pursuing other opportunities soon.


    Continued struggles with 10nm , Credible competition from AMD and ARM and now their growth market has been pulled out from underneath them...


    Doesn't look good for this guy.

  4. Avatar

    skane2600

    Is it really surprising that Qualcomm, a company who's history of developing communication technology stretches back to 1968 and Linkabit, would be better able to design an advanced modem than Intel, a company that specializes in microprocessors and has minimal experience in advanced communications?


    I believe that Intel will be OK for the foreseeable future because the mantra "It's all about mobile" is beginning to sound like predictions of the year of the Linux desktop. Mobile is very important, but it will never be more than a part of the computing landscape.


  5. Avatar

    lvthunder

    Wow Paul, your anti-apple bias is really showing here. You don't know if part of the settlement didn't include better licensing terms. You also don't know if Intel didn't tell Apple they were leaving and that caused the settlement.


    This news is really bad because now there is one less supplier for 5g modems.

    • Avatar

      wocowboy

      In reply to lvthunder:
      Correct on both counts. If the result of Apple's effort is that they have better licensing terms and fees now than they did before the lawsuits began, then one cannot say that Apple was "defeated". We do not know what those terms are and probably will never know, so it is baseless and biased to say that Qualcomm defeated Apple. There is also the small matter of the plethora of lawsuits against Qualcomm that are still being waged by the EU and other governments around the world as well as other device makers. These lawsuits still have to play out, or they might be settled out of court as well. We will have to wait to see how they all turn out.


  6. Avatar

    Ron Diaz

    Intel sounds a lot like Microsoft...

    • Avatar

      Greg Green

      In reply to Hypnotoad:

      Both chairman seem to be caretakers, showing little innovation or direction compared to what got the companies to the top in the first place. Add Apple to that category as well. The focus seems to be on stock prices rather than market share or innovation.

  7. Avatar

    will

    Intel has a problem. Microsoft has been able to pivot away from not having mobile and grow their services strengths. Yet Intel has not been able to move into anything new for years.


  8. Avatar

    Jeff.Bane

    Wow, Intel can't seem to do anything other than x86. Stuff like this makes me think Intel will not exist in the long term.

  9. Avatar

    yoshi

    "has many wondering if the chip-making giant even has a future"


    Yup, personally I don't view Intel as the best anymore in any market, even on desktops/laptops. I upgraded to a new desktop a little less than a year ago and for the first time ever, I opted for an AMD cpu. It saved me money and AMD's Ryzen line is blazing fast for my needs.

    • Avatar

      wright_is

      In reply to yoshi:

      Yes, on the desktop the Ryzen is great. I have a 1700 in my desktop rig (first generation, from the end of 2017). With 8 cores and 16 threads, it is an ideal PC for playing with virtualization.

      Laptops are another matter, here the Ryzen hasn't quite caught up, IMHO. It is close. Plus most of the quality business laptops are Intel only, so there is little choice, at the moment.

  10. Avatar

    glenn8878

    Apple lost even more leverage after this.

  11. Avatar

    Kudupa

    If Intel can't innovative fat enough then, it will have a slow death. I won't cry about either, it enjoyed monopoly and charged/still charge more than the competition. Like Nokia, Intel didn't see the competition coming or didn't react fast enough like Blackberry. So, no one should spare a thought about this firm.

  12. Avatar

    martinusv2

    Ouch.


    Must b why Intel is now targeting gamers with their next GPU. Even in the server space, Intel is getting tough competitions.

  13. Avatar

    dcdevito

    Apple is courting Qualcomm employees in San Diego to make their own modems, in a couple years none of this will even matter. In fact, I bet Apple buys Intel’s modem IP to kickstart it.

  14. Avatar

    kshsystems

    the bottom line is that the world is mobile. if Intel is saying they cannot compete in mobile, then, what's left to say? Yikes!

  15. Avatar

    MachineGunJohn

    in the wake of and on the heels of are extremely inaccurate here, to the point one has to wonder if they were intentionally misleading. Intel internally made the decision to cancel the development of 5G for cell phones and their informing apple of this decision led apple to deal with Qualcomm. Make no mistake apple is still unextreamly unhappy about Qualcomms terms. Intel just couldn't find market justification outside of apple and apple supplier margins are too small and ever shrinking. The rest of the commentary about intel being completely inept in mobile are spot on and have been true for over a decade and through multiple ceos. The board really should exclude all existing management from participation and consideration in choosing the next one.

Leave a Reply