Apple keen to buy 5G chip independence

July 30, 2019 12:07
In acquiring Intel’s modem business, Apple aims to reduce its reliance on outside chip suppliers. Photo: Reuters

Apple had been trying to work with Intel to develop 5G chip technology, but it wasn’t too successful.

With Qualcomm already introducing its second 5G chip and Samsung launching its 5G smartphone, Apple must be feeling tremendous pressure to catch up.

That is perhaps why Apple agreed to settle a two-year legal battle with Qualcomm by paying a hefty loyalty fee, estimated to be around US$5 billion to US$6 billion.

In addition, Apple has to pay Qualcomm US$8 to US$9 loyalty fee for each smartphone.

Apple said last week it would acquire Intel’s modem business in a deal valued at US$1 billion. About 2,200 Intel employees will join Apple under the deal, which also includes intellectual property rights, equipment and leases.

The move indicates Apple’s desire to reduce its reliance on outside chip suppliers.

The market is wondering if Apple will have its first 5G phone ready this year. We'll know the answer in September.

This article appeared in the Hong Kong Economic Journal on July 29

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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Hong Kong Information Technology Federation honorary chairman