Intel surprisingly exits 5G smartphone business, claims there are no positive returns

Intel recently dropped a bombshell when it announced that it shutting down its 5G smartphone business since ‘there is no clear path to profitability and positive returns’.

Renowned chipmaker Intel announced yesterday that it is exiting the 5G smartphone modem business, and will instead focus its 5G wireless efforts on network infrastructure, as well as the 4G and 5G modems for PCs and smart home devices.

“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 realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world,” said CEO Bob Swan.

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Talking about the sudden pulling the plug from 5G smartphone business, Swan mentioned that ‘it has become apparent that there is not clear path to profitability and positive returns’, as per Intel.

“Intel does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020. We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Swan.

Furthermore, this news comes in on the same day that tech giant Apple and Qualcomm surprisingly settled all of their lawsuits involving 5G modems. Apple preciously selected Intel to supply modem chips for its future 5G smartphones, however, Intel backed off mentioning that it ‘does not expect to launch 5G modem products in the smartphone space’.

Nonetheless, experts and industry observers believe that timing for the two major news did not seem like a coincidence. “Did Apple say ‘Intel is too much risk, I need to go back with Qualcomm’ or was this Intel saying ‘This business isn’t great and I don’t want to pour more resources into it’?” analyst Patrick Moorhead said, wrote Business Insider.