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Apple is close to buying Intel's phone chip business, report says

The tech giants could reportedly announce a $1 billion deal next week.

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iPhones could soon have an Apple-made chip.

James Martin/CNET

Apple is getting closer to buying Intel's smartphone modem business, with the iPhone maker now in "advanced talks" with Intel, The Wall Street Journal reported Monday. The deal could be worth $1 billion and include patents and employees, according to the report. Such a deal could help Apple's attempts to develop its own 5G chip for the iPhone.

It follows a report last month that Apple's looking to acquire Intel's German smartphone modem businessApple had originally used modems from German company Infineon when it first launched the iPhone 10 years ago, before switching to Qualcomm in 2011. Intel then bought Infineon in 2011, but those chips weren't used again until the iPhone 7 and iPhone 7 Plus in 2016 after a dispute over Qualcomm's licensing fees.

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When Apple and Qualcomm settled their legal battle and reached a multiyear 5G chip deal in April this year, Intel exited the 5G phone modem business. CEO Bob Swan confirmed to the Journal that the decision was due to Apple and Qualcomm.

Intel told CNET in June it's seen "significant interest" in its 5G modem business, but didn't confirm which companies have been in contact.

"We have hired outside advisers to help us assess strategic options for our wireless 5G phone business," the emailed statement said. "We have created value both in our portfolio of wireless modem products and in our intellectual property."

In May, there were reports that Apple may not have a homegrown 5G modem ready for its iPhones until late 2024 or early 2025. Chipsets are one of the most complex and expensive parts of a smartphone. By producing its own, Apple could reduce reliance on outside companies.

Even with Qualcomm's help, Apple isn't expected to launch a 5G iPhone until at least 2020, despite 5G Android phones from Samsung, Huawei, LG, OnePlus, Lenovo/Motorola, ZTE, Xiaomi and Oppo already announced or available.

5G, already launched in some parts of the US by Verizon, AT&T, Sprint and T-Mobile, is the next-generation network for smartphones to provide faster speeds and more capacity.

Apple and Intel didn't respond to requests for comment.

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