The reasons behind Intel’s failure in developing 5G chips are the result of several factors acting in combination. The main causes can be summarized as follows:
1. Technical Limitations and Delays in Development #
- Intel lagged behind competitors in the development of 5G technology. Particularly, there were past instances where the company failed to provide competitive solutions on time in earlier generations like 3G, 4G, and gigabit LTE, and this issue repeated itself with 5G1.
- Initially, Intel over-invested in the 5GTF (pre-standard technology), led by Verizon, but later had to realign its strategy as it transitioned to 5G NR (standardized technology), leading to delays in development1.
- The lack of a smartphone testing platform complicated the chip performance optimization and validation processes. This was a significant weakness compared to competitors who had integrated testing environments1.
2. Market Environment and Lack of Sales Channels #
- Intel attempted to supply its 5G chips for the iPhone following a legal dispute between Apple and Qualcomm, but lost this key sales avenue when Apple re-entered a contract with Qualcomm23.
- The 5G smartphone modem market was already dominated by strong competitors like Qualcomm, Samsung, and Huawei, making it difficult for Intel, as a latecomer, to secure a competitive edge2.
3. Profitability Issues #
- Intel struggled to find a clear path to profitability in the smartphone modem business. As a result, CEO Bob Swan decided in 2019 to exit this business and focus on other areas such as PCs and IoT2.
4. Failure in Collaboration with Apple #
- While Apple acquired Intel’s smartphone modem division, significant issues arose during the utilization of Intel’s existing designs and code. Bugs such as existing functions being disabled when new features were added continuously slowed down development4.
- Within Apple, there was skepticism about the rationale behind believing that “Intel’s failed project could be turned into a success”4.
Conclusion #
Intel’s failure in developing 5G chips is a complex interplay of technical limitations, changes in the market environment, lack of profitability, and collaboration problems. Ultimately, Intel chose to withdraw from this business and redirect its resources to other fields.