Going Shopping

 
The purchase by Intel of Infineon’s wireless business last week made waves throughout the industry. After all, anytime one large company makes a deal with another large company, it will create some excitement. And given Intel’s long-and-storied history of acquiring companies, the pundits are always going to be enthusiastic about discussing why it has made the decisions it has made.

But this isn’t really much of a surprise.

First, the Infineon perspective:

Infineon has been interested in getting out of the wireless business for some time now, and it seems the volatility of the wireless market (relative to their rock-solid automotive and industrial chip businesses) was something they were never too fond of.

Some in the industry have been talking about Infineon’s concern about Verizon choosing Qualcomm – as the only CDMA player in the market – for the soon-to-be-launched  Verizon iPhone, and how that provided the writing on the wall that was required for Infineon to finally say “No Mas” to wireless.

But to me, whether that is the case or not, the Intel side is much more interesting here than the Infineon angle.

Intel is in the midst of a broadening of its 4G strategy/portfolio, which until now has been 100% WiMAX-focused. And if Intel is going to try to get into the 3G space, the company will have to start thinking about how to approach LTE. Now, given the wireless expertise Intel just acquired from Infineon, maybe the company will divert resources originally earmarked for WiMAX and work on developing an LTE solution. Or perhaps, Intel is going to go shopping again, this time for an LTE product.

Either way, it will be interesting to see what Intel’s next move might be...

-Eran Eshed