intel

Apple to Acquire Majority of Intel’s Smartphone Modem Business

Posted on by Techtime

Intel and Apple have signed an agreement for Apple to acquire the majority of Intel’s smartphone modem business. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. The transaction, valued at $1 billion, is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions, including works council and other relevant consultations in certain jurisdictions.

Intel will retain the option to develop modems for non-smartphone applications, such as PCs, internet of things devices and autonomous vehicles. “This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan. “We will put our full effort into 5G where it most closely aligns with the needs of our global customer base.”

In April, 2019 Intel announced intention to exit the 5G smartphone modem business. “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 Intel CEO Bob Swan.

Following the Apple-Intel announcement, CEVA’s shares in NASDAQ rose by 14%, to $28.99. CEVA from Israel provides the IP for the DSPs in Intel’s cellular modems. This is an important market for CEVA. It was well clear when its stock price had fell 13.6% in April, after Intel’s CEO revealed the exit plan from the smartphone modems business.

CEVA expects revenues from Apple starting Q3

Posted on by Techtime

Photo above: Intel XMM 7360 LTE Advanced modem

By Yohai Schwiger, Techtime

CEVA from Herzliya, Israel, is expected to report meaningful incomes from future iPhones following Apple decision to switch suppliers and give orders to Intel instead of Qualcomm.  A recent report from COWEN, indicates that with Qualcomm excluded entirely from the 2018 iPhone in lieu of CEVA-based Intel modems, CEVA is poised to increase both its unit share and royalies coming from  Apple.

COWEN: “We believe it should drive a powerful mix shift beginning in late 3Q18 when the phone begins shipping. Management indicated that Intel will be using a new DSP core for the iPhone modems manufactured at Intel’s foundry, which we estimate could bring 30-40% initial ASP bump for CEVA – in addition to the 50% unit share increase. By our math, this could present a $10M+ incremental revenue opportunity over the next four quarters for CEVA.

CEVA is a leading licensor of signal processing platforms (DSP) and a primary player in artificial intelligence (AI) processors. The analysts Matthew Ramsay, Joshua Buchalter and Ethan Potasnick believe that 4.9G/5G basestation chip royalties represent the largest near-term incremental revenue opportunity for CEVA.

“We continue to see a $20M+ incremental evenue opportunity from just Nokia and ZTE by 2020. In fact, CEVA recently announced an agreement with a 3rd 5G basestation customer and remains in discussion with a fourth (likely Samsung and Ericsson since Huawei does its own DSPs).”