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Apple-Qualcomm settlement led to Intel's exit from 5G phone modem market

Chip giant's CEO tells The Wall Street Journal the decision was directly related to the settlement.

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Intel CEO Bob Swan confirms his company's decision to exit the 5G phone modem business was based on Apple's settlement with Qualcomm.

Intel

Just hours after Apple and Qualcomm announced a settlement in their long-running patent battle earlier this month, Intel said it would exit the 5G phone modem business. But the chip giant didn't say at the time whether its decision was based on the settlement.

It apparently was, according to a Wall Street Journal interview with Intel CEO Bob Swan.

"In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn't see a path," Swan told the newspaper.

Intel on April 16 said it plans to cease working on modems for 5G, the next-generation of wireless technology expected to supercharge mobile connections. It had been working on a processor for Apple, with the chip expected to be in iPhones in 2020. Lately there have been worries the chip wouldn't be ready until iPhones released in 2021.

The announcement came the same day that Apple and Qualcomm announced they had reached a settlement in their two-year legal battle over licensing royalties. Apple in January 2017 had accused Qualcomm of anticompetitive practices that have raised chip prices, restricted competition and hurt customer choice. Qualcomm, the world's biggest mobile chipmaker, had countered that the iPhone wouldn't be possible without its technology, and it deserved to be paid for its innovation.

In a statement at the time, Intel said it would "complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices." It also said it will "continue to invest in its 5G network infrastructure business."

When Swan was asked whether Intel was considering selling its 5G smartphone modem business, he told the Journal that the company is "evaluating alternatives on what's the best course for our IP and our people."

An Intel representative confirmed Swan's comments but declined to comment further.

CNET's Shara Tibken contributed to this report.

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