Intel Ends 5G Smartphone Modem Market; Other customer modeling companies to be considered
With today's announcement by Apple and Qualcomm that the two violent rivals have buried the hatchet for good, the situation immediately raises the fate of Intel's modem business. As Intel's only major smartphone modem cartridge, Apple's business and huge order volume made Intel's smartphone modem business an all-or-nothing affair. Now that Apple and Qualcomm apparently reconcile with Apple again with Qualcomm's modems, Intel has released an announcement this afternoon that they are leaking out of the 5G smartphone modem market altogether.
In the short announcement, Intel stated that it was scrubbing its plans to launch 5G smart phone modems, including modems planned for next year, ie the smartphone version of XMM 81[ads1]60. Intel's rationale here, while not mentioning Apple / Qualcomm, simply, with Intel's CEO Bob Swan, notes that the company does not see a "clear path to profitability and positive returns." Without a large customer, Intel will not be able to reverse its R&D costs.
However, note that this does not mean the average Intel exits the smartphone modems completely, at least not immediately. The company's announcements also make it clear that Intel will continue to deliver 4G modems to current customers (such as Apple) to meet its sales obligations. So while we don't see any Intel powered phones in the 5G time, Intel remains a party in the 4G time – at least as long as Apple continues to buy modems from them.
Meanwhile, Intel announces that along with canceling their smartphone modem plans, they will also use this opportunity to rethink the rest of the customer's modem portfolio. Intel's plans for the XMM 8160 took it far beyond smartphones, with plans to put it in devices such as PCs and broadband access ports as well. Now the company has to find out if these plans still make sense – if the XMM 8160 will be competitive in these markets, and if continued development and production makes sense without major smart phone customers. At this point, Intel faces an uphill in the rest of the client fashion market, and there is a very good chance that Intel's re-evaluation will find that there is no place for the company in this competitive market.
Interesting, while Intel is In a way to throw the towel on client 5G, the company also makes it clear that they intend to stay in the lucrative 5G infrastructure market, and that today's announcement is about client products. To use Intel's favored buzzword here, the company still runs hard on its data-centric approach to chips, which means they're still investing heavily in servers, infrastructure, and AI.
