Intel has announced that they are purchasing mobile chip supplier Infineon, who make chips for smartphones like the Apple iPhone, and own a portfolio of products which cover the full range of mobile chips including WiFi, 3G, WiMax, and LTE.
The acquisition will cost Intel $1.4 billion, and will give them a strong foothold in the smartphone market, as Infineon is ranked fourth in cellular baseband shipments, with around 10.7 percent of the market last year.
“The global demand for wireless solutions continues to grow at an extraordinary rate,” Intel CEO Paul Otellini said in a statement.
“The acquisition of Infineon’s WLS (Wireless Solutions) business strengthens the second pillar of our computing strategy–Internet connectivity–and enables us to offer a portfolio of products that covers the full range of wireless options from Wi-Fi and 3G to WiMax and LTE (4G).”
Strategic Importance of the Acquisition
The acquisition of Infineon’s Wireless Solutions business is a strategic move for Intel, as it allows the company to diversify its product offerings and enter the rapidly growing mobile market. With the increasing demand for smartphones and other mobile devices, having a strong presence in the mobile chip market is crucial for any tech company looking to stay competitive. Infineon’s expertise in cellular baseband technology, which is essential for mobile communication, will be a valuable asset for Intel.
Moreover, this acquisition aligns with Intel’s broader strategy to expand beyond its traditional PC-centric business. By integrating Infineon’s technology, Intel can enhance its capabilities in producing chips that support a wide range of wireless communication standards, including the latest 4G LTE technology. This will not only help Intel capture a larger share of the mobile market but also position the company as a key player in the development of next-generation wireless technologies.
Impact on the Mobile Industry
The acquisition is expected to have a significant impact on the mobile industry. With Intel’s resources and Infineon’s technology, the combined entity will be well-positioned to compete with other major players in the mobile chip market, such as Qualcomm and MediaTek. This increased competition could lead to more innovation and potentially lower prices for consumers.
Furthermore, Intel’s entry into the mobile chip market could accelerate the development and adoption of new wireless technologies. For instance, Intel has been a strong advocate for WiMax, a wireless communication standard that competes with LTE. With Infineon’s expertise, Intel could further develop and promote WiMax as a viable alternative to LTE, providing consumers with more options for high-speed wireless connectivity.
The deal is expected to be completed by the end of the first quarter in 2011, and it has been approved by the board of directors at Intel and the management board at Infineon.
via 9 To 5 Mac
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