[ksec]

Intel has a history of acquiring company and then sell it for less ( e.g McAfee ). The Wireless Modem was acquired from Infineon in 2010 for $1.4B. It had 3500 employees then, compared to only 2200 moving to Apple now along with lots of Wireless patents that Intel has contributed to LTE and 5G NR over the years. The $1B sounds like a very good deal.

My guess is that the recent Intel BaseBand modem design are worth very little to Apple. It is based on Intel's 14nm ( and 10nm for the 8160 5G NR Modem ) , since Intel is winding down their Custom Foundry, and Apple has a much better relationship with TSMC, the chance of Apple fabbing their Modem with Intel is close to Zero. The last TSMC Intel Modem was Intel XMM 7480 used in iPhone 8 / X.

But even if the Modem is literally worthless, I would have thought the patents are worth a little more than $1B?

I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.

Edit: On another note. The Honor 9x [1] is selling in China for $280 VAT inc. If that is $250 excl VAT, the iPhone XR selling at $750 is 3x the price. Apple got a lot of explaining to do for the market to justify its price tag. And privacy alone, which is what they are pushing is not enough.

[1] https://www.anandtech.com/show/14667/honor-unveils-9x-9x-pro...

[iamdead]

> Apple got a lot of explaining to do for the market to justify its price tag.

If it were down to feature lists and price tags, Apple wouldn't be selling very many phones. It seems Apple might be explaining itself in a way that doesn't resonate with you, which is which is fine.

> I am wondering if part of the deal is making sure Apple sticking to x86 and Specifically Intel's x86 CPU on the Mac for at least another 5 years. No ARM or AMD Mac.

I suspect that Apple had a lot of leverage in this negotiation, since they were the main ones interested in using Intel's modems as leverage against Qualcomm. So Intel's modems are more valuable to Apple than they are to other players, including Intel. But I don't know anything.

[derefr]

> Intel's modems are more valuable to Apple than they are to other players, including Intel

That implies that Intel has the leverage. Intel's BATNA is to just let the modem IP rot. It's a sunk cost. They can just walk away from the negotiating table, and they'll be choosing to get $0 + ($small * potential of selling to anyone else = $ε) instead of $1B.

Apple's BATNA, meanwhile, is for Qualcomm to steamroll them and force them into expensive concessions across the board, and they're willing to pay through the nose to avoid that. Their choice is between $1B to intel and likely far more than $1B to Qualcomm.

[ineedasername]

Yes, and Apple still has lots of cash on hand, >$200billion. $1billion is a small price to pay in order to solidify a strong bargaining position with a multi-billion dollar vendor contract that has been a legal and financial thorn in their side. Especially given their long term roadmap for i-devices has been one of gradual vertical integration.

[rjvs]

If Intel hadn’t sold to Apple, they would have had to pay out severance packages to 2200 engineers, plus break costs on whatever ongoing contracts existed (leases etc). So the comparison isn’t +$1B against $0, more like +$1B against -$1B (or at least a decent fraction of that), with the costs growing every day that the negotiations continued and the likelihood of a sale to anyone else continuing to drop (from a very low base).

[ksec]

>If it were down to feature lists and price tags, Apple wouldn't be selling very many phones. It seems Apple might be explaining itself in a way that doesn't resonate with you, which is which is fine.

I wish it was just the Internet, but increasingly I have had people complaining about iPhone's prices in Real life, and they are not in the Tech Circle. A few days ago the podcast from Macobserver on Apple's prices had a section on it as well, more people are questioning the prices, especially when they have something else to compare to.

I could paid double the price simply because of iOS. But 3x is a little hard, and I cant explain to friends why is Apple so expensive either.

[Steko]

> 3x is a little hard, and I cant explain to friends why is Apple so expensive either.

How do you explain to them that Huawei's own P30 Pro sells for several times what their Honor 9x sells for? Does Huawei need to explain that to the market too? We've seen high spec midrange phones that sold for a fraction of flagship prices for years but Apple has never attempted to go after that part of the market.

And I imagine if you wanted to you could compile a long list of iphone selling points besides privacy. For example, my wife's nearly two year old iphone 8 has a ST Geekbench score that's 50% higher than the Honor 9x (4228 vs 2832). Maybe that's part of why Gazelle will pay more for her phone today ($289, 64 gb) than the 9x retails for.

[mantap]

The problem is that Apple intentionally crippled the XR so that they could more easily upsell people to the XS.

This punishes users who want to replace their iPhone 7, since Apple simply doesn't make a good phone in that price bracket anymore.

[ineedasername]

It's worse than that in my opinion, because Apple's prices have the effect of sort of "giving permission" to other flag ships to also jack up prices significantly. The Galaxy S7 edge was retailed at $779 on release. The comparably positioned s10 plus starts at $999. More with more storage space, though I don't recall if the s7 edge had additional internal storage upgrades like that (it did have user expandable storage though)

[threeseed]

Seriously this again.

A product is worth more than just the sum of its physical components. The quality of the apps, consistency of end user experience, integration with my other devices, multi-year support and yes commitment to privacy and security are worth $500 to me. And to hundreds of millions of other people.

Otherwise is a Rolex really worth that much more than a Seiko. Or how about a Ferrari versus the new Corvette.

[ineedasername]

Rolex, Ferrari, and even Corvette probably all have high prices in part because they're niche items that don't really leverage economies of scale, not as much as lower priced mainstream cars. But I take your point. Though in terms of cars, I probably point to Volvo, their excellent safety features etc., that increase price as a good comparison to the Apple Tax.

[ayrx]

I don't disagree with your overall point but in the world of high-end watches Rolex watches _are_ mass produced and leverage economies of scale. I think the latest estimates are around 800,000 watches produced per year by Rolex.

[wmf]

I am wondering if part of the deal is making sure Apple sticking to x86 and specifically Intel's x86 CPU on the Mac

That goes against everything Apple stands for; they will not give up control for any amount of money. The Qualcomm deal was really an emergency outlier.

[jen20]

> And privacy alone, which is what they are pushing is not enough.

Absolutely, it is. Of course, it's not the only point of competition, but if it were, I would still pay the additional amount to not be the product.

[dublin]

Reasonable privacy should be a given. That's all Apple provides. The Chinese brands actually provide negative privacy - that is there's an expectation that they're spying on you. No one gives a damn about real user privacy in the smartphone market. We really need another mobile platform option, since neither iOS nor Android are acceptable from a privacy point of view.

[PaulHoule]

I remember talking to someone about how Intel's acquisitions performed poorly and he pointed out infineon and I shook my head.

You think some ceos should be under a covenant that they can't acquire companies the same way that alcoholics shouldn't drink.

[clouddrover]

> And privacy alone, which is what they are pushing is not enough.

Apple has the best mobile processors. How does the Kirin 810 in the Honor 9X compare to Apple's A12 or the upcoming A13?