Intel says it sold its cellular modem business at a loss because Qualcomm squeezed it out

Back in July, Intel announced that it was selling off its smartphone modem business to Apple for a billion dollars. As it turns out, that price was a bit low, and Intel said in a court filing today that it took a multi-billion dollar loss on it. The filing was made in the 9th U.S. Circuit Court of Appeals, with Qualcomm trying to overturn a recent antitrust ruling.

Intel says that the reason it had to sell its cellular business at such a loss was that Qualcomm squeezed them out. Indeed, Judge Lucy Koh wrote that Qualcomm "strangled competition" when it came to cellular modems, according to the report in Reuters today.

Intel's Steven Rodgers said in a press release, "We invested billions, hired thousands, acquired two companies and built innovative world-class products that eventually made their way into Apple’s industry-leading iPhones, including the most recently released iPhone 11. But when all was said and done, Intel could not overcome the artificial and insurmountable barriers to fair competition created by Qualcomm’s scheme and was forced to exit the market this year."

While Qualcomm modems are already common in Android phones that use Qualcomm chipsets, Apple's iPhones have used Intel modems in recent years. That came to an end in April, when Apple and Qualcomm settled some legal issues, and one of the terms was that the Cupertino firm would start purchasing its modems from Qualcomm. At that point, it was the beginning of the end for Intel's business.

Intel is still able to sell 4G LTE modems in PCs, but it announced that it was abandoning 5G development the very day that Apple and Qualcomm announced their settlement. Now, Intel's 5G PCs will come with MediaTek modems, and not until 2021.