“There is no clear path to profitability and positive returns”
Intel has washed its hands of the 5G smartphone modem business, announcing the decision hours after Apple and Qualcomm settled all their global litigation and agreed a long-term chip supply deal for 5G-ready iPhones.
The company “does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020” Intel CEO Bob Swan said in a short statement on Wednesday, adding that the company will meet customer commitments for its 4G smartphone modem line.
Projects killed will include Intel’s long-promised XMM 8160 5G multimode modem; intended for Apple’s 2020 iPhone. Intel in November 2018 said it had “accelerated the timing of this modem… by more than a half-year.”
“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Swan today.
“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”
Read this: Apple and Qualcomm Agree to Dismiss “All Global Litigation”, Clinch Chipset Supply, Licence Deal
The company had decision comes after it was widely reported that Intel, which was to be Apple’s sole supplier of 5G modems for its 2020 iPhones, looked unable to deliver sample parts to Apple by early summer as Apple requested.
The iPhone maker was said to be “demanding” that its orders be first in line for Intel’s fabs, forcing the chipmaker to lower the priority of higher-margin chip orders.
Intel will “complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices” Intel said, adding that it will “continue to invest in its 5G network infrastructure business.”
The company will continue to meet current customer commitments for its existing 4G smartphone modem product line. It expects to provide additional details in its Q1 earnings release and conference call, scheduled for April 25.
5G modems need to be able to support blisteringly quick download times, (Intel had promised peak speeds of up to 6 gigabits per second) and do things like adaptive beam forming, beam steering and beam tracking which are engineered to improve mmWave signal range and coverage; e.g for when the device isn’t in direct line of sight.
Qualcomm’s Snapdragon X50, for example, does 8X carrier aggregation (CA), combining eight different 100 MHz blocks of mmWave spectrum and, the company promises, is able to replace fiber-to-the-home (FTTH) installations with wireless 5G connections.