Apple pays $1bn for Intel modem business as it seeks more control over iPhone parts – The Telegraph


Apple will pay $1bn (£800m) for Intel’s smartphone modem business as chief executive Tim Cook aims to increase the company’s grip on the microchips that power the iPhone.

As part of the deal, Apple will take on 2,200 Intel employees and thousands of patents related to wireless technology, the companies said.

Apple currently relies on Intel’s wireless chips to connect to 4G mobile networks, but Intel has struggled to catch up to the industry leader Qualcomm, meaning that this year’s iPhone will come without the 5G technology that is making its way into rival smartphones.

Qualcomm and Apple recently settled a longstanding legal battle, meaning future versions of the iPhone will include Qualcomm chips and forcing Intel to put the business up for sale, but Mr Cook is seeking to cut its reliance on external suppliers. 

In recent years it has dropped graphics chip designs from Britain’s Imagination Technologies in favour of its own, and bought key power management technology from Reading-based Dialog Semiconductor.

The deal is one of Apple’s biggest acquisitions to date, second only to its 2014 purchase of headphone maker Beats. The company has been hiring top talent from Intel’s wireless division in recent months.

Apple’s hardware boss Johny Srouji said: “[This deal] will help expedite our development on future products and allow Apple to further differentiate moving forward.”

It came as both Amazon and Google’s parent company Alphabet unveiled results for the three months to the end of June.

Shares in Amazon dropped slightly as it fell short of profit forecasts despite sales rising. The online retail giant said profits had risen only slightly, from $2.5bn to $2.6bn, despite a 20pc increase in sales. The company is currently investing heavily on cutting delivery times for members of its Prime subscription service from two days to one day.

Alphabet, meanwhile, confounded fears that its advertising juggernaut was slowing down, revealing that profits had soared to $9.9bn and sales had increased by 19pc to $38.9bn.

Investors had feared that the company’s exceptional growth over the past two decades was coming to an end, but the results sent shares rising by 7.7pc in after-hours trading.