Analysis: Intel's wireless move no guarantee of success

Peter Clarke, EETimes
8/30/2010 1:15 AM EDT

Repeatedly leaked in advance and therefore fully expected, Intel and Infineon have agreed that the world's largest chip company should acquire the wireless business unit of Infineon for about $1.4 billion in cash.

As a result Intel becomes a supplier of wireless transceivers to numerous cell phone makers and into Apple's wildly successful iPhone and iPad products. And Infineon becomes 30 percent smaller than it was, arguing that this allows it to focus on automotive and industrial applications.

My view is that this deal that gives a Intel a $1.4 billion ticket to bet on itself in the convergence of communications and personal computing – but no guarantee of success. And it gives Infineon a cash booster but is perilous for the company – as one executive's restructuring can be another's deconstruction by a thousand cuts.

Turning to Intel: the key piece of evidence is that the company has shown itself poor at competing in any other major sector except PCs.

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