Intel has announced that it will no longer bring a 5G modem to market following the cessation of hostilities between Apple and Qualcomm. The move confirms rumors we heard last week that Intel’s modem business might be in trouble.
Intel’s press release states:
Intel Corporation today announced its intention to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices. Intel will also continue to invest in its 5G network infrastructure business.
Intel goes on to say that it now has no plans to release any of its 5G modems, including devices previously scheduled for 2020. It will meet existing customer obligations for the 4G product family, but that’s it. Presumably, this means that Intel will still have the Apple iPhone SKU for 2019, it being rather late in the design cycle to make that change, but will be replaced once again for Qualcomm thereafter.
This Time Actually Looked Different
The most surprising thing about this outcome is that Intel seemed to genuinely be improving its 5G market position relative to where it was in LTE last generation. The company had gotten active in 5G early — much earlier than in the equivalent LTE cycle. Winning Apple’s business was a major feather in Intel’s cap. It’s not clear if Apple’s decision to work with Qualcomm is why Intel left the business, or if Intel’s inability to create a 5G modem forced Apple to find new suppliers. If we had to guess, we’d guess the latter.
Intel isn’t getting out of the 5G market altogether — there remain considerable opportunities in backhaul, small cells, and networking that the company can leverage. But the expectation here was that Intel would use its own 5G modems to make a play for that socket of next-generation laptops and connected PCs, owning another segment of the business and creating another revenue driver for itself (assuming, of course, that 5G cellular laptops ever become a thing).
But this is still a significant negative outcome for a company that’s made multiple attempts to break into mobile and failed, every single time. We’ve discussed the problems surrounding Atom and Intel’s mobile push before, in this two-part series, but you can trace the issue back even further to more than 20 years ago. Intel has consistently attempted to break into the communications markets at multiple points in its history, only to struggle to do so. The company may be willing to throw in the towel. Anshel Sag, an analyst with Moor Insights Strategy, told ExtremeTech, “I believe that Intel is seriously considering selling the division or closing the division and selling IP to Apple.”
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