TechPulse 360

Remember the late 90′s, when Intel was throwing billions in its quest to become a telecommunication powerhouse, to finally write it all off?

Well, sounds that the chipmaker is at it again with the recent acquisitions of Infineon’s cellular and GPS technology as well as the assets of small 4G vendor Comsys.

Hopefully, the mastermind of Intel’s first telecom foray, Sean Maloney, might remember one or two things learned from his first failed attempt to build a communications empire!

As analyst Linley Gwennap writes it,

“Making it clear that money is no object in its quest to become a major player in the smartphone market, Intel plans to acquire the wireless operations of Infineon in a deal valued at more than $1.2 billion. Infineon’s cellular and GPS technology will complement Intel’s Atom processor and Wi-Fi expertise, allowing Intel to deliver a complete solution for the rapidly growing smartphone and tablet-computer markets.”

Infineon ranked fourth in cellular-baseband shipments last year with 10.7% unit share, according to a recent report from The Linley Group. Infineon is a major supplier to Apple, Nokia, and Samsung.

But “the German vendor lacks an application processor, however, making success in the smartphone market difficult, and it has struggled to sell its 3G baseband outside of Apple,” adds Linley.

The analyst adds that in a quieter but significant move, Comsys acquisitions brings a processor for WiMax phones and was working on converting that design to support LTE.

Intel’s secret goal (well not anymore!) is to merge Infineon and Comsys technologies to create its own 4G solution coupled to its Atom chip for smartphones.

“Intel is clearly focused on smartphones, leaving the future of Infineon’s popular 2G processors in doubt. This deal could end up helping vendors such as Broadcom, MediaTek, and ST-Ericsson, which could step into the breach with their own 2G processors. Conversely, the deal gives Intel the technology it needs to develop an integrated 3G-smartphone processor, allowing it to compete against vendors such as Qualcomm and Marvell,” says Linley.

First published in TechPulse 360.