Intel Eyes The Smartphone Segment
In a swift and somewhat surprising move, semiconductor giant Intel took quick steps towards breaking into the smartphone chip market in which it has an insignificant presence.
The world’s largest chip maker dominates the high end personal computer and server processor market as well as the low end Atom chips in the no-frills net book market. However rarely are their chips found in the fastest growing smartphone and domestic gadget segments where other manufacturers dominate.
Last fortnight, in a couple of all cash, billion dollar deals, Intel lapped up two companies who could help them change that. The purchase of security giant McAfee deal for $7.68 billion was quickly followed by picking up the mobile chip unit of the German company Infineon for $1.4 billion to make a decisive entry into the smartphone market that has grown at over 25% annually since 2005.
Intel has been trying to get into the high volume digital TV, gadgets and Smartphone market that is growing phenomenally each year and is expected to add over half a billion customers annually by 2011. By acquiring McAfee it will gain software needed for the security aspect of the mobile segment and embedded technologies including hacking prevention and theft control. In short it will strengthen the software offering of the hardware manufacturer.
The mobile chip making unit of Infineon, which accounts for 30% of the company’s turnover is today the fifth largest manufacturer in this segment after Qualcomm, Texas Instruments, Broadcom, and the UK based ARM. The market share of Infineon’s wireless division had been dropping each year and it was making large losses before its new CEO Peter Bauer took charge in 2008. He changed the focus of the unit and had planned the revival of the WLS division for profitable selling, and the deal with Intel has been known to the market for months.
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