"I hate that chip store... I wish there were another in town." That's the thinking behind Apple's reported interest in acquiring the smartphone chip division at Intel. Intel is/was really good at making computer chips, but not so good at mobile chips for smartphones. Here's Intel's rocky relationship with Apple for the iPhone:
- 2007 — 2016: Qualcomm was Apple's go-to modem provider.
- 2016 — April 2019: Apple put its arm around Intel, hoping it could offer the same chips as Qualcomm for a lower price.
- April 16, 2019: Apple begrudgingly settled lawsuits with Qualcomm, and agreed to use its chips again for at least 6 years.
- Also April 16, 2019: Since Apple broke up with it, Intel announced it was done with smartphone modems.
We're talking about the "bottleneck"... iPhones start as raw materials and end fitting nicely on your palm. In between there's a value chain, including workers, factories, stores... and modems. Qualcomm is the only chip company able to offer the modems for 5G phones, so Apple has no choice but to work with them.
This is about busting Qualcomm's bottleneck... Qualcomm's stock fell 3% after the WSJ's report — if Apple's able to resurrect Intel's patents, research, and engineers into a functioning 5G chip assembly line, Qualcomm will lose the power it has over the iPhone. If not, Qualcomm will keep naming its chip price.