Intel Exits 5G Smartphone Modem Market; Other Client Modem Businesses to Be Reviewedby Ryan Smith on April 16, 2019 8:05 PM EST
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With today’s announcement out of Apple and Qualcomm that the two fierce rivals have buried the hatchet for good, the situation immediately put into question the fate of Intel’s modem business. As Intel’s only major smartphone modem patron, Apple’s business and enormous order volume made Intel’s smartphone modem business an all-or-nothing affair. Now, as Apple and Qualcomm are seemingly reconciling towards Apple once again using Qualcomm’s modems, Intel has sent out an announcement this afternoon that they are bowing out of the 5G smartphone modem market entirely.
In the brief announcement, Intel stated that it was scrubbing its plans to launch 5G modems for smartphones, including modems planned for next year, i.e. the smartphone version of XMM 8160. Intel’s rationale here, while not mentioning the Apple/Qualcomm deal, is rather simple, with Intel’s CEO, Bob Swan, noting that the company doesn’t see a “clear path to profitability and positive returns.” Without a major customer, there won’t be an opportunity for Intel to make back their R&D costs.
Note however that this doesn’t mean Intel is getting out of smartphone modems entirely, at least not right away. The company’s announcement is also making it clear that Intel will continue delivering 4G modems to current customers (e.g. Apple) to meet their sales commitments. So while we won’t see any Intel-powered phones in the 5G era, Intel will remain a fixture in the 4G era – at least as long as Apple keeps buying modems from them.
Meanwhile Intel is also announcing that alongside canceling their smartphone modem plans, they’re also going to use this opportunity to reevaluate the rest of their client modem portfolio. Intel’s plans for the XMM 8160 took it well beyond smartphones, with plans for putting it in devices like PCs and broadband access gateways as well. Now the company needs to figure out if these plans still make sense – if the XMM 8160 will be competitive in these markets, and if continued development and manufacturing make sense without a large smartphone customers. At this point Intel faces an uphill battle in the rest of the client modem market, and there’s a very good chance that Intel’s reevaluation will find that there’s no place for the company in this highly competitive market.
Interestingly however, while Intel is on a path to throwing in the towel on client 5G entirely, the company is also making it clear that they intend to stay in the lucrative 5G infrastructure market, and that today’s announcement is only about client products. To use Intel’s favored buzzword here, the company is still driving hard on its data-centric approach to chips, which means they continue to be invested heavily in servers, infrastructure, and AI.
Ultimately, if this is to be the end of Intel’s client modem business, it’s certainly been one heck of a ride for the group. After supplying modems for all of Apple’s 2G and 3G iPhones as Infineon’s wireless solutions group, the modem business was sold to Intel in 2011, who largely struggled with the business since then. Intel’s 4G modems were late to market, and there are still debates over whether they’re as good as the best 4G modems available today. As a result, Intel was never able to recapture the same kind of success the group saw in the 2G/3G era.
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Yojimbo - Wednesday, April 17, 2019 - linkIt's so frustrating trying to get layman-level technical information about Intel's current and upcoming products because everything they put out is contorted to the extreme by their marketing department. The purported strategies are based around what they think sounds good an any performance benchmarks are cherry picked to a ridiculous level. I remember them claiming 5G connectivity was a key part of their competitive advantage for their autonomous vehicle products. Now they won't offer client 5G modems so that entire claim is out of the window. They seem to operate like defense contractors, developing huge projects and then shuttering them with very little, if anything, getting out the door. Only they aren't able to get taxpayers to pay for it, they pay for it with their huge CPU profits.
Gunbuster - Wednesday, April 17, 2019 - linkStill waiting for the consumer use case on 5G... Besides hit your data cap or throttle point in 65 seconds?
FunBunny2 - Wednesday, April 17, 2019 - linkouch!!! and nobody ever needs more than 640K memory. Bill said so. but I digress. it's not clear that mmWave/5G is all that useful. unless human's eyesight devolves to a 6" diagonal viewport so that we all watch GoT while driving.
all of these 'new' computer 'innovations' of the last few decades haven't promoted economic growth, just sped up diversions. the end of Western Civilization in front of us.
ABR - Wednesday, April 17, 2019 - linkCan’t argue with you there.
sandtitz - Thursday, April 18, 2019 - linkThat's not a problem in those 1st world countries where data caps don't exist. I feel sorry for the US consumers ...well, not really.
Yojimbo - Friday, April 19, 2019 - linkIt's not hard to imagine there will be things to do with more bandwidth. The hard part is coming up with them. When they increased bandwidth in the past did people say "oh, great, now we'll have taxicab replacements"?
The thing is the major uses aren't going to be more of what is already in place they are going to be things that weren't possible before. That's generally the case.
amosbatto - Friday, April 19, 2019 - linkI predict that 5G will be like Blu-ray. In a couple years, every high-end phone phone on the market will be capable of 5G reception, but few people will use it. It will only be available in limited places and it will be very costly to implement. Plus, people are going to start worrying about the health and environmental effects of living next to so many cellular base stations transmitting at such high frequencies. With LTE Advanced Pro being so much cheaper and easier to implement than 5G, I predict that in 5 years, most people are going to decide that 5G isn't worth it, just like most people decided that DVDs were good enough for watching movies and didn't pay the premium for Blu-ray.
RealBeast - Friday, April 19, 2019 - linkCan't disagree. I'm interested in the Samsung S10 5G but only because it has a bigger battery. ;)