SAN FRANCISCO — Apple said on Thursday that it would buy most of Intel’s smartphone-modem business for $1 billion, aiding its push to gain more control over faster wireless technology in iPhones.
Apple will add about 2,200 Intel employees, as well as patents and equipment. The deal is expected to close in the fourth quarter and is subject to regulatory approval.
Analysts say Apple will develop a 5G iPhone by late next year. Those iPhones are expected to use chips from Qualcomm, another chipmaker that, until recently, was in a legal fight with Apple over royalties and other business practices.
But after that, the business Apple is acquiring from Intel will allow the iPhone maker to reduce its dependency on Qualcomm.
An iPhone capable of running on 5G networks, which offer speeds far faster than current wireless connections, would have big implications. A 5G iPhone could push the spread of such networks across the globe and encourage the adoption of new technologies that run on 5G, such as industrial robots, security cameras, drones and cars.
Qualcomm is Intel’s main competitor in the business of smartphone modems, which are critical chips that help phones connect to wireless networks.
In April, Apple and Qualcomm settled a yearslong legal dispute. Although the companies are now on better terms, Apple has long sought to take more control over the critical parts inside of its devices.
Gene Munster, a longtime Apple analyst and a partner at the investment firm Loup Ventures, said that given Apple’s enormous cash pile, the $1 billion deal is a smart move for Apple to take more control over its business.
“It makes a ton of sense, given that they ultimately want to replace Qualcomm’s chips and this is the fastest path to that,” he said
This is a developing story and will be updated.