Episode: Apple Dials - Up Intel's Modem Biz


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Apple Dials - Up Intel's Modem Biz
If modems are a commodity why did Apple just pay $1B to acquire one? Apple’s acquisition of Intel’s modem business is not only a bargain cost-wise but a great deal for Apple AND Intel from a focus and control perspective. Apple gains 2,200 high-end engineers ready to take modems to the next level, control over a key component in its iPhone products, and over 17,000 wireless patents, while Intel sheds a product and development line that was an increasingly unprofitable distraction. A predictable fallout of the Apple-Qualcomm litigation settlement, we’re surprised it too them this long to pull it off. Apple has a long history of bringing technology in-house, particularly when the availability (or lack of) becomes a risk to its operational delivery, if cost control can improve margins, or if the technology needs to be embedded into other components, rather than just remain a discrete component. Modems fit all three criteria. The question now becomes how, or when, might Apple leverage this new skillset into its broader product lines, from wearables to healthcare and perhaps the automotive/infotainment market? THIS WEEK’s FAST FIVE > US to deny tariff relief for Apple Mac Pro parts from China > Johannesburg Ransomeware Attack > T-Mobile and Sprint finally find their holy grail as their merger is approved by the DOJ > How Apple, Microsoft and Foxconn are investing in technology, this time through SoftBank’s Vision Fund 2 focusing on AI > Australia’s new Algorithm Policing Office seeks to pull back the veil of secrecy on the algorithms Google and Facebook use in their products This week's Tech Bites Winner: Are digital delivery apps stealing their employee’s tips? In the latest twist on the app-based service economy it appears that some app companies are using customer’s tips to offset their own labor costs. Our Crystal Ball: When will Apple release its own 5G modem in a flagship iPhone? Hint: Pick a year and add one more to be safe. INFORMATION: This Futurum Podcast features Olivier Blanchard (@OABlanchard), Fred McClimans (@fredmcclimans) and Shelly Kramer (@ShellyKramer). If you haven't already, please subscribe to our show on iTunes or SoundCloud. For inquiries or more information on the show, email the team at podcast@futurumresearch.com or follow @FuturumPodcast on Twitter. To learn more about Futurum Research please visit www.futurumresearch.com. DISCLOSURE: Futurum Research is a research and analysis provider, not an investment advisor. The Futurum Tech Podcast (and all related written notes and materials) is a newsletter/podcast intended for entertainment and informational purposes only. Futurum Research does not provide personalized investment advice and no investment advice is offered or implied by this podcast.

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