Intel sells modem business to Apple at major loss

Based on a report by Reuters, Intel claims that the sale of its modem chip business to Apple, which took place in July this year, was at “a multi-billion dollar loss.” The chipmaker stated this in a court filing last week, where it also mentioned that due to Qualcomm’s licensing practices, it was unable to compete on a level playing field.

Intel also published a blog post about the issue. It opposes Qualcomm’s appeal of the judgement against it’s namesake by the United States District Court, Northern District of California. In this case, the District Court found that:

“Qualcomm’s licensing practices have strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs and end consumers.”

It went on to say that it found Qualcomm’s conduct:

“Qualcomm’s licensing practices have strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs and end consumers.”

Due to its anti-competitive practices, Qualcomm was fined nearly $1 billion in China, $850 million in Korea, $1.2 billion by the European Commission and $773 million in Taiwan (later reduced in settlement). In the US, the FTC did not levy such penalties against Qualcomm, instead, chose to take steps to prevent Qualcomm from continuing such practices.

Intel believes that the mobile chipmaker’s business practices do not promote fair competition. And as a result, despite nearly a decade of attempting to setup a modem chip business, it had to throw in the towel. Intel also says that, at the end of the day, the consumers are the real losers, due to the lack of choices made available to them.

Photo Credit: Walden Kirsch/Intel Corporation

Sources:
Reuters
Intel Blog