Becoming a one-stop-shop
As had been extensively anticipated, Intel announced yesterday it has agreed to acquire Infineon's Wireless Solutions (WLS) business for $1.4 billion in cash.
Intel CEO Paul Otellini has made it clear that the ultimate purpose of this move is to be able to offer 3G and ultimately LTE connectivity with its mobile chips and, ultimately, integrate the modem silicon into one SoC.
"The global demand for wireless solutions continues to grow at an extraordinary rate," he said. "The acquisition of Infineon's WLS 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.
"As more devices compute and connect to the Internet, we are committed to positioning Intel to take advantage of the growth potential in every computing segment, from laptops to handhelds and beyond."
The biggest wireless chipset provider is currently Qualcomm. It's also probably the strongest player in the application processor market with Snapdragon and, furthermore, it differentiates itself from other SoC makers by integrating the wireless modem into the chip. So we think it's fair to say that the company most targeted by Intel's latest acquisition is Qualcomm.
Over a year ago, having learned about Qualcomm's ambitions in the SoC space, we concluded it was Intel's biggest competitor. This development only serves to reinforce that impression. Now Intel has the capability to offer 3G, as well as WiMAX and Wi-Fi as part of the package when selling a mobile chip. Since it's effectively at war with the entire ARM ecosystem, it needs to be able to offer a one-stop-shop mobile solution without relying on any part of that established community.
This is also part of a broader strategy to prioritise the embedded market. Thanks to recent acquisitions Intel can now also provide the modem for your cable TV connection and provide hardware-based security. The strategy seems to be to convince potential customers to abandon ARM in favour of x86 by simply offering more.
