Apple would reportedly pay $1 billion-plus for patents and engineers.
From a story posted after close of market Monday in the Wall Street Journal ($):
Apple is in advanced talks to buy Intel Corp.’s smartphone-modem chip business, according to people familiar with the matter, a move that would jump-start the iPhone maker’s push to take control of developing the critical components powering its devices.
A deal, covering a portfolio of patents and staff valued at $1 billion or more, could be reached in the next week, the people said—assuming the talks don’t fall apart…
Intel and Apple have been in off- and on-again talks for about a year. They broke down around the time Apple reached a multiyear supply agreement for modems with Intel rival Qualcomm Inc., The Wall Street Journal reported in April..
The Apple-Intel discussions began last summer, around the time former Intel Chief Executive Brian Krzanich resigned, people familiar with the matter have said. Mr. Krzanich championed the modem business and touted 5G technology as a big future revenue stream. When Bob Swan was named to that job in January, analysts said the odds of a deal rose because his focus on cleaning up Intel would require addressing the losses in the modem business.
From Evercore’s Amit Daryanani:
We think the rationale (from AAPL’s perspective) to have an alternative solution to QCOM is fairly logical. While it is unclear if AAPL could truly build a scalable 5G modem in-house, we think strategically it is important for AAPL to have multiple suppliers for key components especially given the history of litigation between AAPL and QCOM.
My take. Yup. But there’s many a slip ‘twixt the cup and the lip.