Intel to Stop Making Modem Chips for 5G Smartphones

Date : 04/17/2019 @ 9:01AM
Source : Dow Jones News
Stock : Qualcomm Incorporated (QCOM)
Quote : 85.68  -1.15 (-1.32%) @ 7:04PM

Intel to Stop Making Modem Chips for 5G Smartphones

Qualcomm Incorporated (NASDAQ:QCOM)
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By WSJ City 

Intel dropped plans to make modem chips for 5G smartphones, it said on Tuesday, hours after its chief rival in that market, Qualcomm resolved a years-long legal dispute with Apple.

KEY FACTS

--- Intel's decision removes a major rival to Qualcomm for a critical component in next-generation mobile phones.

--- It follows a settlement between Qualcomm and Apple, Intel's biggest customer for those chips.

--- That settlement includes a multiyear deal for Qualcomm to supply Apple a major reversal after the iPhone maker shifted to Intel as its sole supplier.

Why This Matters

Intel's withdrawal leaves only a handful of competitors to Qualcomm for 5G modems, which are small chips that manage connection and the transfer of data between smartphones and cell towers.

Intel could sell the business, although it isn't clear who would buy it, said Srini Pajjuri, an analyst at Macquarie Research. Without a customer like Apple in place and with regulatory scrutiny of any transaction, the proposition may not look attractive. Intel declined to comment on whether its announcement was related to news of the Apple-Qualcomm deal.

A fuller story is available on WSJ.com

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(END) Dow Jones Newswires

April 17, 2019 03:46 ET (07:46 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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