Intel Kills 5G Modem Plans

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.