Intel announced plans to exit the smartphone modem business as it has been unable to turn a profit. The company said it will complete orders for its existing 4G products but will not release a 5G modem as earlier intended. The chipmaker is reviewing its business for modems in PCs and IoT devices and said it will continue to support the mobile network infrastructure business.
Intel CEO Bob Swan said in a statement that "it has become apparent that there is no clear path to profitability and positive returns" for the smartphone business. 5G remains a "strategic priority", he said, and the company will continue to develop its portfolio of patents and related equipment. "We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world," the CEO said.
Intel said as recently as February that it expected to have its 5G modem completed by year-end and in products from Q1 2020. The decision to exit the business may be related to the settlement of Apple's dispute with Qualcomm. Intel became Apple's preferred supplier over the past three years due to the problems with Qualcomm, and if the two resume business, it will mean a significant loss of revenues for Intel's smartphone operations.
