Intel Exits 5G Smartphone Modem Market; Other Client Modem Businesses to Be Reviewed

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With today’s announcement out of Apple and Qualcomm that the two fierce rivals have buried the hatchet for good, the situation immediately put into question the fate of Intel’s modem business. As Intel’s only major smartphone modem patron, Apple’s business and enormous order volume made Intel’s smartphone modem business an all-or-nothing affair. Now, as Apple and Qualcomm are seemingly reconciling towards Apple once again using Qualcomm’s modems, Intel has sent out an announcement this afternoon that they are bowing out of the 5G smartphone modem market entirely.

In the brief announcement, Intel stated that it was scrubbing its plans to launch 5G modems for smartphones, including modems planned for next year, i.e. the smartphone version of XMM 8160. Intel’s rationale here, while not mentioning the Apple/Qualcomm deal, is rather simple, with Intel’s CEO, Bob Swan, noting that the company doesn’t see a “clear path to profitability and positive returns.” Without a major customer, there won’t be an opportunity for Intel to make back their R&D costs.

Note however that this doesn’t mean Intel is getting out of smartphone modems entirely, at least not right away. The company’s announcement is also making it clear that Intel will continue delivering 4G modems to current customers (e.g. Apple) to meet their sales commitments. So while we won’t see any Intel-powered phones in the 5G era, Intel will remain a fixture in the 4G era – at least as long as Apple keeps buying modems from them.

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