With at the moment’s announcement out of Apple and Qualcomm that the 2 fierce rivals have buried the hatchet for good, the state of affairs instantly put into query the destiny of Intel’s modem enterprise. As Intel’s solely main smartphone modem patron, Apple’s enterprise and massive order quantity made Intel’s smartphone modem enterprise an all-or-nothing affair. Now, as Apple and Qualcomm are seemingly reconciling in the direction of Apple as soon as once more utilizing Qualcomm’s modems, Intel has despatched out an announcement this afternoon that they’re bowing out of the 5G smartphone modem market completely.
In the transient announcement, Intel said that it was scrubbing its plans to launch 5G modems for smartphones, together with modems deliberate for subsequent 12 months, i.e. the smartphone model of XMM 8160. Intel’s rationale right here, whereas not mentioning the Apple/Qualcomm deal, is moderately easy, with Intel’s CEO, Bob Swan, noting that the corporate doesn’t see a “clear path to profitability and positive returns.” Without a significant buyer, there gained’t be a possibility for Intel to make again their R&D prices.
Note nonetheless that this doesn’t imply Intel is getting out of smartphone modems completely, no less than not instantly. The firm’s announcement can also be making it clear that Intel will proceed delivering 4G modems to present prospects (e.g. Apple) to fulfill their gross sales commitments. So whereas we gained’t see any Intel-powered telephones within the 5G period, Intel will stay a fixture within the 4G period – no less than so long as Apple retains shopping for modems from them.
Meanwhile Intel can also be asserting that alongside canceling their smartphone modem plans, they’re additionally going to make use of this chance to reevaluate the remainder of their shopper modem portfolio. Intel’s plans for the XMM 8160 took it nicely past smartphones, with plans for placing it in gadgets like PCs and broadband entry gateways as nicely. Now the corporate wants to determine if these plans nonetheless make sense – if the XMM 8160 will probably be aggressive in these markets, and if continued growth and manufacturing make sense with out a big smartphone prospects. At this level Intel faces an uphill battle in the remainder of the shopper modem market, and there’s an excellent probability that Intel’s reevaluation will discover that there’s no place for the corporate on this extremely aggressive market.
Interestingly nonetheless, whereas Intel is on a path to falling by the wayside on shopper 5G completely, the corporate can also be making it clear that they intend to remain within the profitable 5G infrastructure market, and that at the moment’s announcement is barely about shopper merchandise. To use Intel’s favored buzzword right here, the corporate continues to be driving exhausting on its data-centric strategy to chips, which suggests they proceed to be invested closely in servers, infrastructure, and AI.
Ultimately, if that is to be the tip of Intel’s shopper modem enterprise, it’s definitely been one heck of a experience for the group. After supplying modems for all of Apple’s 2G and 3G iPhones as Infineon’s wi-fi options group, the modem enterprise was offered to Intel in 2011, who largely struggled with the enterprise since then. Intel’s 4G modems have been late to market, and there are nonetheless debates over whether or not they’re nearly as good as one of the best 4G modems accessible at the moment. As a end result, Intel was by no means in a position to recapture the identical type of success the group noticed within the 2G/3G period.
