The $1 billion acquisition of most of Intel's (INTC.O) data machine (modem) business is a big step towards supplying its own mobile chip.
According to the deal, about 2,200 Intel employees will join Apple, including intellectual property rights (intellectual property rights), equipment and leasing. This, together with the original lineup, will enable Apple to own 17,000 wireless technology patents ranging from mobile communications standards to data machines, making it a stronger player in possible global licensing negotiations with major 5G patent holders such as Huawei.
Intel shares jumped 5.7% to $55.05 after the news came out and the company reported better-than-expected earnings. Intel closed down 1.44% to $52.16. Apple closed down 0.79% to $207.02.
After the transaction, Intel will retain the right to develop non smart phone application data machines such as personal computers, industrial equipment and autopilot cars.
Devices such as the iPhone are connected to wireless data networks via data chips, but Apple has always relied on external suppliers in this area. After Apple and its former supplier Qualcomm (QCOM.O) were caught up in a lengthy lawsuit over Qualcomm's patent licensing, Intel took the opportunity to become the sole supplier of the iPhone data chip in the past year.
The agreement with Intel will help achieve Apple's goal of producing its own data chip. Apple's two major global competitors, Samsung Electronics (005930.KS) and Huawei, already have data chip self-sufficiency.
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