Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Why Intel's Infineon buy is a smart move

The purchase will help Intel become a player in the mobile market, one analyst says.

Intel has been on a buying binge lately. Just two weeks ago the world's largest chip maker agreed to acquire security vendor McAfee for $7.68 billion, and today it announced plans to buy Infineon Technologies' Wireless Solutions (WLS) division for $1.4 billion.

While the McAfee purchase has led to a certain amount of head-scratching from industry watchers and Intel investors who failed to see the synergy between Intel and a security software maker, the Infineon deal appears to be a better fit.

"Wireless connectivity is crucial for Intel's future," say wireless and telecom industry analyst Jeff Kagan. "They have to be a leader in that rapidly growing space, and they are not yet."  

The WLS purchase is all about Intel's need to expand into growing markets such as the smartphone sector. "Infineon makes chips for smart phones like Apple's iPhone. This acquisition will help Intel move rapidly in this growing space," adds Kagan, who's followed the telecom industry for 25 years.

In a statement released today, Intel said its plans to leverage WLS' expertise in 2G and 3G cellular technologies to create low-power processors that expand the company's portfolio of wireless products. The merger would combine Intel's expertise in cutting-edge 4G wireless services, including WiMAX and LTE, with WLS' strengths in older cellular data offerings.  

"This acquisition makes sense for the company. Whether it will be successful will take a while to determine," says Kagan.

The impact on consumer and business customers is less clear.

"Consumers don't buy phones and devices because of the chips," Kagan says. "They buy because of the brand and what it can do. I don't see customers going into a store and buying a device because it has an Intel logo on it, the way they do with laptops."

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Apple, Infineon, Infineon Technologies, Intel, McAfee
References show all

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: 3g, 4g, Cell Phones, consumer electronics, Infineon, Infineon Technologies, Intel, lte, networking, Phones, Telecommunication, VoIP, WiMax, wireless
Latest Blog Posts
Whitepapers
  • Case Study: HJ Heinz
    Heinz has trusted Sophos to protect its desktop users and email systems from malware and spam for many years. As part of its multi-tier approach to IT security, the company needed more robust protection against web-based threats and the use of unauthorised applications.
    Learn more »
  • Investment Protection and Elasticity for your Network
    Enterprise IT teams are being challenged to increase overall IT flexibility and business agility by incorporating emerging cloud technologies into their next generation datacentre architectures. Top of mind is how to embed a high degree of elasticity to properly handle increasingly unpredictable application traffic loads, while still meeting strict performance service level agreements (SLAs). Satisfying these often opposing goals requires that individual elements within the larger datacentre infrastructure provide a native capability to increase capacity and performance as conditions dictate. Read on.
    Learn more »
  • Staying Secure and Preventing Data Leaks in a Cloud-obsessed World
    If your organisation is to benefit from this explosive growth, it needs to be able to exploit all that the cloud has to offer. But at the same time, it is vital to protect your company’s employees, networks, data and reputation from the risks that exist in the cloud.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments