New iPhones could see radical change if Apple buys Intel chip business

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Apple's latest iPhone models now use modems sourced exclusively from Intel, but the company settled its long-standing royalties lawsuit with Qualcomm in April amid plans to sell 5G iPhones in 2020.

The iPhone maker is looking to acquire Intel's Smartphone Modem Chip business.

A report from the WSJ reveals that talks on a potential deal started many months ago when Apple was still involved in a legal war against San Diego-based chipmaker Qualcomm.

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In June, a report in The Information said that Intel has been considering "selling its struggling modem business in pieces", with the German modem operations potentially going to Apple. Assuming that happens, Apple would benefit from Intel's previous push to develop modem chips for future 5G phones and tablets. Apple and Qualcomm entered a six-year patent license agreement, as well as a multiyear chipset supply agreement. That will essentially further its endeavour in creating its own in-house 5G modems. As well, and assuming the deal goes through, Apple would be positioned to take control of one component critical to its iPhones. However, the sources say Intel soon resumed talks with Apple about its modem chip business and, if the sources are correct, we may hear an official deal announcement in coming days as a result. CEO Bob Swan confirmed to the Journal that the decision was due to Apple and Qualcomm.

The publication notes that, unless talks fall apart, Apple and Intel could close the deal within a week. Intel now provides modems for Apple's 4G LTE iPhones.

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