In an important development, Intel announced on Tuesday that it is going to stop making 5G modem chips for phones, according to a report by ZDNet. The company plans to focus its energy on 4G and 5G modems for PCs and smart home devices and also its wider 5G infrastructure business.
This latest move by the chipmaker acquires all the more importance in light of the fact that Apple and Qualcomm struck a surprise deal in the ongoing legal dispute regarding licensing royalties. Intel had been working on 5G chips for Apple, but the chips were not expected to arrive until late 2020. The two warring factions have called for a truce and agreed to a six-year license agreement, effective from April 1.
Speaking about the statement, Intel CEO Bob Swan said, “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.”
This decision by Intel means that Qualcomm is the sole supplier of chips for Apple’s iPhones. ZDNet failed to get a response from Intel as to whether this step was in reaction to the developments between Apple and Qualcomm or it was taken before the two reached a settlement.
Intel further noted:
“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.”
This current move makes Qualcomm the sole supplier of chips for Apple iPhones and Apple will now pay Qualcomm an undisclosed amount as royalties which the chipmaker had accused Apple of withholding.