Why Intel ditched 5G laptops, and what to expect next

Intel made waves this week when news broke that it had stepped back from making 5G laptops with partner MediaTek. According to analysts, the move isn't a huge surprise given the paltry sales of such gadgets so far, and Intel's troubles with 5G devices in general.

However, there's a possibility that 5G-capable laptops might enjoy a second wind in the coming years thanks to alternatives from the likes of Qualcomm and others. But thanks to heated legal proceedings among some of the biggest semiconductor players on the planet, it's unclear whether those products will ever hit the market.

In the meantime though, 5G network operators hoping for additional service revenues from the sale of 5G connections to laptops will likely remain unsatisfied. And that's important considering network operators in general haven't seen a massive spike in their revenues thanks to 5G, despite spending billions of dollars putting the technology into action.

Intel's 'difficult decision'

Intel recently decided to exit the market for 5G laptops and will eventually discontinue its line of 4G offerings as well. Analyst Jack Gold first reported the news, and Mobile World Live confirmed the development with Intel.

Specifically, Intel told the publication that its exit from cellular networking "does not impact Intel's Wi-Fi, Bluetooth, Ethernet, Thunderbolt or network and edge businesses." The company said it would work with "partners and customers" to ensure "a seamless transition to support their ongoing business."

"Intel has been lukewarm about cellularly connected laptops ever since they exited their modem business," explained analyst Wayne Lam, with TechInsights, in response to questions from Light Reading.

Intel sold its 5G modem business to Apple in 2019, and subsequently inked a deal with MediaTek to add 5G capabilities to its chipset products for laptop manufacturers like Lenovo and Dell. However, Lam noted that Intel recently introduced its new "Intel Unison" product that tightly pairs Intel-powered laptops with an owner's existing iOS or Android smartphone – thereby essentially negating the need to put 5G directly into its laptops.

The 5G disappointment

"Connected PC sales have been a disappointment. A diverse group of companies such as Qualcomm, Microsoft, T-Mobile and HP have stated the space has been a disappointment in our conversations," analyst Jeff Fieldhack, with Counterpoint Research, wrote in response to questions from Light Reading. Fieldhack explained that computer retailers like Best Buy haven't done a good job of explaining the benefits of 5G-capable laptops to shoppers, and big 5G operators like AT&T and T-Mobile haven't stepped into that gap to promote such gadgets.

Further, Fieldhack said that 5G-capable laptops often cost $50 to $100 more than their Wi-Fi-only counterparts – and operators' monthly 5G service fees don't help. "Consumers have not been convinced thus far," he said.

Figure 1: According to March data from the Global mobile Suppliers Association (GSA), laptops accounted for just 1.5% of all announced 5G form factors. The firm counted 1,840 announced 5G devices across 26 different form factors.
(Source: GSA. Used with permission)

According to Counterpoint's Hanish Bhatia, cellular-connected PCs account for less than 4% of the global PC market – which itself has been in a dramatic decline during 2022. And, according to TechInsights' Eric Smith, global laptop vendors shipped about 1 million 5G cellular-capable laptops globally during 2022.

The Qualcomm equation

The exit of Intel doesn't necessarily spell the end for 5G-powered laptops. Qualcomm, via its acquisition of Nuvia in 2021, is planning to release its Oryon platform for laptops – including 5G laptops – next year. The offering could represent a powerful, and power-efficient, alternative to Intel's x86 platform for PCs – by far the dominant platform in laptops today.

Such a product would undoubtedly please 5G network operators considering Qualcomm's core business centers on selling silicon to 5G phone vendors like Apple and Samsung.

Qualcomm's broad plan is to expand beyond smartphones, in part by supporting Windows-based laptops with cellular connectivity "to a point where everyone would want to have 5G on their laptops," according to TechInsights' Lam.

"I have used Windows on [Qualcomm] Snapdragon devices, and they are awesome," Counterpoint's Fieldhack added. "Days of battery life, powers up like a phone, no messing with public Wi-Fi – a lot to love."

But there's an ARM-sized hitch in Qualcomm's plans. Arm, a silicon tech vendor owned by Japan's SoftBank, sued Qualcomm last year, alleging that Qualcomm's Nuvia-based chips unfairly use ARM's intellectual property. The suit is noteworthy considering Qualcomm, MediaTek and a wide variety of other tech players design low-power chips in part using ARM technologies. Indeed, Apple's newest M-series processors are based on ARM's technology, and laptops running atop those processors helped the company weather the 2022 slump.

Counterpoint predicts ARM-based laptops will capture 25% of the market by 2027, from around 13% in 2022. (It's unclear whether ARM's new plan to raise prices ahead of its planned US initial public offering will affect that trajectory.)

"Supply chain disruptions and legal challenges have delayed the adoption [of 5G laptops] but the market looks ripe for disruption especially with Qualcomm onboarding all major PC OEM [original equipment manufacturer] partners," summed up Counterpoint's Bhatia.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano