Intel announces plans to pull out of 5G smartphone market

Bob Swan, interim chief executive officer along with chief financial officer of Intel Corp., reacts during the inauguration of the company's research along with development facility in Bengaluru, India, Nov. 15, 2018.

Samyukta Lakshmi | Bloomberg | Getty Images

Bob Swan, interim chief executive officer along with chief financial officer of Intel Corp., reacts during the inauguration of the company’s research along with development facility in Bengaluru, India, Nov. 15, 2018.

Intel said on Tuesday in which the item’s dropping out of the 5G smartphone market just hours after Qualcomm along with Apple announced a six-year licensing agreement as part of a royalty settlement.

“The company will continue to meet current customer commitments for its existing 4G smartphone modem product line, nevertheless does not expect to launch 5G modem products inside smartphone space, including those originally planned for launches in 2020,” Intel said in a statement late Tuesday.

Intel shares rose about 4 percent to $58.97 in extended trading after the announcement. The company said the item will provide additional details about its plans in its earnings report on April 25.

In January, Intel named Robert Swan as permanent CEO, ending a months-long search following the ouster of Brian Krzanich. the item’s up to Swan to find markets in which work for Intel as sales of PCs continue to slide. The company said in which in addition to exiting 5G smartphones, the item’s assessing its future in so-called internet of things devices, or the growing number of gadgets in which are connected to the web.

inside smartphone market, “the item has become apparent in which there is usually no clear path to profitability along with positive returns,” Swan said inside statement. The company has warned inside past in which margins are lower inside device market than in data centers. Intel said the item will keep investing in its 5G network infrastructure business.

Earlier inside day, Qualcomm shares surged 23 percent following the disclosure in which Apple will pay the chipmaker as part of a settlement. According to Qualcomm, a brand new license between the two companies is usually six years, having a two-year option to extend.

Qualcomm is usually the dominant independent supplier of 5G modems, while Samsung along with Huawei make processors for their own devices.

–CNBC’s Jordan Novet contributed to This specific report.

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