Intel abandons its quest to break into 5G smartphones after Apple and Qualcomm reconcile

Telegraph Reporters
Attendees take a virtual reality tour at an Intel showcase in Las Vegas, January 2019 - AFP

Intel has announced that it is winding down a multi-billion-dollar, multi-decade effort to win a foothold in the mobile phone industry. 

The mammoth chipmaker, whose products dominate many other kinds of computing but which has struggled to compete in mobile hardware, said it would meet current orders but cancel its planned new products.

Its mobile business had previously received a boost from Apple, which was locked out of using more popular mobile phone chips made by Qualcomm by a byzantine legal dispute over patents.

But on Tuesday, Apple said it had settled with Qualcomm and that it would return to using Qualcomm chips. Hours afterwards, Intel announced that it would exit the smartphone business. 

“[Intel] will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020,” the company said. 

It added that it would assess whether its existing chips and 5G modems can be used in personal computers instead of smartphones.

In making that decision, Inte's chief executive Bob Swan, who stepped up from being its chief financial officer in January, is ending an effort that his predecessors poured billions of dollars into over the years.

With Apple as an exclusive customer, Intel still struggled to make money in modem chips, even as its position in other markets fueled revenue and profit growth.

Analysts had speculated that the ascension of a leader from a financial background to Intel’s top job would prompt a reassessment of some business units that haven’t delivered.

The company has struggled to win new customers as the phone market eclipsed the personal computer industry, in which Intel has its roots. Before combining the mobile business into its PC chip division, it reported billion-dollar losses as it paid out subsidies to try to woo phone and tablet makers.