Intel announces plans to pull out of 5G smartphone market

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

Samyukta Lakshmi | Bloomberg | Getty Images

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

Intel said on Tuesday of which This specific’s dropping out of the 5G smartphone market just hours after Qualcomm in addition to 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, however does not expect to launch 5G modem products within the 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 This specific 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. This specific’s up to Swan to find markets of which work for Intel as sales of PCs continue to slide. The company said of which in addition to exiting 5G smartphones, This specific’s assessing its future in so-called internet of things devices, or the growing number of gadgets of which are connected to the web.

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

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

Qualcomm is actually the dominant independent supplier of 5G modems, while Samsung in addition to Huawei make processors for their own devices.

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

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