Intel abandons 5G iPhone plans following Apple’s Qualcomm settlement

Welp, that was fast.

Just hours after Apple and Qualcomm announced that they’d finally settled their long-running legal battle, Intel says it’s abandoning its plans for a 5G smartphone modem. 

“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,” Intel CEO Bob Swan said in a statement. 

Prior to the Qualcomm settlement, Intel was Apple’s sole modem supplier for the iPhone XS and XR. And Intel was reportedly struggling to deliver its planned 5G modem, raising questions about whether Apple would even be able to deliver a 5G-ready iPhone in 2020. 

Now that Qualcomm is back in the fold — the two companies reached a six-year licensing agreement and a “multi-year” chip supply deal — Apple no longer needs Intel. And Intel, which in the past has struggled to deliver its PC chips on schedule, has opted to ditch the project entirely.

The news would appear to suggest that Intel plans to eventually exit the smartphone modem business entirely. Intel said it will “continue to meet current customer commitments for its existing 4G smartphone modem product line,” and that it will “complete an assessment of the opportunities” for PC modems. The company will also make investments would be in its “5G network infrastructure business.”

While that’s great news for Qualcomm, whose stock shot up following news of the settlement, it does mean that Apple will be forced to once again rely on a single modem supplier, something Apple has tried to avoid in the past.