Intel abandoned plans to launch 5G smartphone modems after concluding there is no money to be made from the business, and will complete an assessment of the opportunities for 4G and 5G modems in PCs and IoT devices.

The company said it will meet current customer commitments for its existing 4G smartphone modems, but “does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020”.

Newly-minted Intel CEO Bob Swan said it became apparent to the company that “there is no clear path to profitability and positive returns” for its smartphone modem business.

“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

Intel said it will share additional information about the change during its upcoming earnings call on 25 April.

Timing
The move came shortly after Qualcomm and Apple announced an unexpected deal to settle their long-running disputes. The pair signed a new six-year patent licensing agreement, along with a multi-year chipset supply contract that likely killed Intel’s goal of becoming Apple’s 5G chip supplier.

Anshel Sag, associate analyst covering mobility and VR with Moor Insights and Strategy, told Mobile World Live “modems are not core” to Intel’s business, adding it “struggled repeatedly to make a profit, get customers and keep timelines”.

With its only customer, Apple, signing a deal with Qualcomm, Sag said Intel was forced to decide whether to keep up its effort or step aside.

“They will probably have 5G modems in PCs and possibly even automotive, but I believe that they might ultimately end up selling the entire modem business to Apple.”