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Intel to acquire iPhone chipmaker Infineon's wireless unit for $1.4B

post #1 of 50
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Intel will increase its presence in the mobile phone market with the announced $1.4 billion acquisition of the wireless division of Infineon, a significant component supplier for Apple's iPhone.

Intel and Infineon announced Monday that they had agreed to the deal, in which Intel will own the wireless business of Germany's Infineon Technologies in exchange for $1.4 billion in cash. The deal pertains to a range of wireless technologies, including Wi-Fi, 3G, WiMAX and LTE.

Infineon makes the baseband chip found in the iPhone, and the company has had a strong partnership with Apple, supplying chipsets for Apple's smartphone since it was first released in 2007.

The relationship between Apple and Intel, however, has not been as rosy, as tension has stemmed from the fact that Apple opted to rely on ARM architecture for the iPhone and iPad. Intel has even publicly slammed the iPhone, stating that the device is not capable of accessing the "full Internet," and asserting that such functionality requires Intel-based architecture.

Apple has also entered into the chipmaking business, through key acquisitions of PA Semi for $278 million in 2008, and Intrinsity this year for $121 million. Those purchases set the stage for Apple to make its own custom A4 processor, based on the ARM architecture, found in the iPad and iPhone 4.

On the other hand, Intel has pushed its low-power, low-cost Atom processor for mobile devices, including smartphones, but the chips still cost more and use more power than their ARM competitors. The Atom was even pegged to be coming to Apple products in 2008, though it never came to be.

A deal between the Intel and Infineon has been rumored for the last month, though previous reports had alleged the company's wireless chip division could go for a price as high as $2 billion.
post #2 of 50
let's see if Intel makes customers put Intel Inside stickers on their phones
post #3 of 50
This could be interesting. What if they were to take the technology and merge it into their mobile processor so that there's no other option than to use their chip? Are their any other companies out their like infineon?

:-/ I kept saying apple should buy this company. People said infineon would never sell because German companies don't do that... It's not how they do business. Guess they were wrong.

Hope it means nothing more than am aquisition.
post #4 of 50
What a shame SJ didn't snap this company up, 1.4 B is small change to Apple. This is not good news for Apple I would have thought as it puts Intel in the position of control and making it hard if not impossible for special versions designed with and for Apple that no one else gets. Are there rival companies Apple could acquire to bring this technology in house as they have with the A4 chip I wonder?
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post #5 of 50
Quote:
Originally Posted by josephwinters View Post

This could be interesting. What if they were to take the technology and merge it into their mobile processor so that there's no other option than to use their chip? Are their any other companies out their like infineon?

:-/ I kept saying apple should buy this company. People said infineon would never sell because German companies don't do that... It's not how they do business. Guess they were wrong.

Hope it means nothing more than am aquisition.

Yeah Apple should have brought them as companies sell all the time its just not the norm for German companies as they will let you have a share but keep majority control...guess it just depends on if its that important to them...maybe if it were a auto company it would be different
post #6 of 50
Quote:
Originally Posted by digitalclips View Post

What a shame SJ didn't snap this company up, 1.4 B is small change to Apple. This is not good news for Apple I would have thought as it puts Intel in the position of control and making it hard if not impossible for special versions designed with and for Apple that no one else gets. Are there rival companies Apple could acquire to bring this technology in house as they have with the A4 chip I wonder?

Are there any reports that Apple uses truly customized radio processors for Macs, iPhones, and iPads? My assumption has been those are essentially off-the-shelf parts they've buying from Infineon. If true, this deals matters little if anything to Apple.
post #7 of 50
Quote:
Originally Posted by Hudson1 View Post

Are there any reports that Apple uses truly customized radio processors for Macs, iPhones, and iPads? My assumption has been those are essentially off-the-shelf parts they've buying from Infineon. If true, this deals matters little if anything to Apple.

That may be true now but who knows in the future? The same could have been said about the use of the CPU chips. With the history Apple have of being able to improve on the design of so many parts that generic suppliers have no need, ability or desire to I would not rule out Apple being able to do the same for these off the shelf parts. That said I hope you are right at least for the near future. That still leaves the danger of supply being 'slowed' for what ever reason when it may not be good for Apple and perhaps good for someone else.
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post #8 of 50
Quote:
Originally Posted by digitalclips View Post

That may be true now but who knows in the future? The same could have been said about the use of the CPU chips. With the history Apple have of being able to improve on the design of so many parts that generic suppliers have no need, ability or desire to I would not rule out Apple being able to do the same for these off the shelf parts. That said I hope you are right at least for the near future. That still leaves the danger of supply being 'slowed' for what ever reason when it may not be good for Apple and perhaps good for someone else.

Along those lines, I think this is better for Apple. Infineon supplies these parts to all kinds of mobile phone and computer makers. With Intel taking this over, I would suspect they are going to be more, not less, receptive to what Apple needs since Apple is already such a huge customer. Infineon may have been indifferent between Apple, Motorola, Nokia, etc. but which of those three is the biggest Intel customer?
post #9 of 50
Infineon is down over 3% for the day. I would have thought this would have boosted the stocks value.



Quote:
Originally Posted by digitalclips View Post

What a shame SJ didn't snap this company up, 1.4 B is small change to Apple.

They can afford it but I dont recall Apple ever buying something so pricy in the past.
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post #10 of 50
oops, that may hinder the swith to amd...
post #11 of 50
Ok.

Apple does more and more in-house anyway these days.

Interesting to see what Intel will do with it.
post #12 of 50
If you can't force Apple to use your mobile processors, buy another company they already use and then get a piece of that pie.
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post #13 of 50
I wonder if Intel will try to use this as leverage to keep Macs running Intel. After Apple used ATI cards in most (all?) of the new macs there has been talk of moving over to AMD, which I mostly support (nothing against intel I just think AMD would have more time to customize their chips for apple then Intel which already has big customers.) Or perhaps intel is trying to keep apple as a customer even if they do leave for AMD.

Of course this could also mean that Intel wants to integrate wireless right into their Atom platform to make it more attractive for cell phone makers. I guess we'll have to wait and see.
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post #14 of 50
I think I have a different take as it relates to Apple. Maybe Apple is dumping Infineon, which gives them an incentive to get acquired. Do Qualcom and Infineon compete in that particular space?
post #15 of 50
Quote:
Originally Posted by sheff View Post

I wonder if Intel will try to use this as leverage to keep Macs running Intel. After Apple used ATI cards in most (all?) of the new macs there has been talk of moving over to AMD, which I mostly support (nothing against intel I just think AMD would have more time to customize their chips for apple then Intel which already has big customers.) Or perhaps intel is trying to keep apple as a customer even if they do leave for AMD.

Of course this could also mean that Intel wants to integrate wireless right into their Atom platform to make it more attractive for cell phone makers. I guess we'll have to wait and see.

If the last part is true could Apple do the same with the A4 down the road? My knowledge of chips is limited to the ones in England you put vinegar on.
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post #16 of 50
Quote:
Originally Posted by aaarrrgggh View Post

I think I have a different take as it relates to Apple. Maybe Apple is dumping Infineon, which gives them an incentive to get acquired. Do Qualcom and Infineon compete in that particular space?

In that scenario one might suspect either Infineon or Intel knew something about this ahead of time. However, if so I'd have thought Intel would have had a good bargaining position. Was 1.4 B a high price or a low one? I see above 2B is mentioned perhaps supporting the suggestion you make.
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post #17 of 50
Quote:
Originally Posted by aplnub View Post

If you can't force Apple to use your mobile processors, buy another company they already use and then get a piece of that pie.

Exactly what I thought. The very fact that Intel set its eyes on Infineon vindicates this!
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post #18 of 50
Intel bought Infineon because they have similar company designed logos and the first part of their business names sounds the same... Innnn... Not too much to change on letterhead, business cards or envelopes. Wonder if Infineon's commercial has any similar sound like "Bonnggg.... bong, bong, bong, bong" in it anywhere?!

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post #19 of 50
Quote:
Originally Posted by solipsism View Post

They can afford it but I dont recall Apple ever buying something so pricy in the past.

Relative to the value of their holdings and revenue (and the devaluation of the dollar over 14 years), their $400 million of NeXT was probably larger. But the benefit and importance to Apple of the NeXT acquisition was also massively more.

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post #20 of 50
Quote:
Originally Posted by Tulkas View Post

Relative to the value of their holdings and revenue (and the devaluation of the dollar over 14 years), their $400 million of NeXT was probably larger. But the benefit and importance to Apple of the NeXT acquisition was also massively more.

It was in fact 'everything'.

I often wonder how far off SJ was at NeXT to what was to become OSX. Given Apple was all but bust when he returned the iMac could have presumably come from NeXT has SJ put his mind and money to it. Or was he prevented in this by Apple patents?
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post #21 of 50
1.4 billion
So why didn´t Apple bought it in the first place? 1.4 Billion is just a fraction of Apple´s capital.

Are they planning on manufacturing their own baseline controllers?
post #22 of 50
Intel must know something. Infeon has a several year contract with APPLE and the conclusion would be that APPLE intends to keep making an IPHONE for ATT perhaps without exclusivity.

Keep in mind, that INFINEON supplies radio chips to a couple cellphone makers.
In any case It's believable that INTEL only bought this to make money and stay in the Smartphone game.
post #23 of 50
I never understand the line of reasoning that because one can do a thing, they should. I assume Apple looked into buying Infineon and found that the cost-to-profit ratio wasn’t high enough. Apple could have bought Skype for $2.75 billion, but that doesn’t mean they should. It might be more beneficial to Apple and others to simply buy the components from Infineon as needed while looking at other suppliers for similar components.


Quote:
Originally Posted by Tulkas View Post

Relative to the value of their holdings and revenue (and the devaluation of the dollar over 14 years), their $400 million of NeXT was probably larger. But the benefit and importance to Apple of the NeXT acquisition was also massively more.

If we consider inflation maybe, if we consider the valuation absolutely.
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post #24 of 50
Quote:
Originally Posted by josephwinters View Post

This could be interesting. What if they were to take the technology and merge it into their mobile processor so that there's no other option than to use their chip? Are their any other companies out their like infineon?

IF they do that it would be one hell of a technical achievement. The RF portion of such a device creates a hell of a lot of electrical noise, which a digital processor just can't cope with, so trying to put them together in the same package (let alone the same piece of semiconductor material), is incredibly hard to achieve.

I don't know for sure about Infineon, but most RF devices are made using Gallium Arsenide as the base material. Processors and the like use silicon. Whilst you can make a processor on GaAs, it's not nearly as cost effective as using silicon, since GaAs is more expensive to buy in the first place, and is much more difficult to manufacture on.
post #25 of 50
Quote:
Originally Posted by AppleInsider View Post


Intel and Infineon announced Monday that they had agreed to the deal, in which Intel will own the wireless business of Germany's Infineon Technologies in exchange for $1.4 billion in cash. The deal pertains to a range of wireless technologies, including Wi-Fi, 3G, WiMAX and LTE.


We all know a Verizon iPhone is coming and this acquisition further strengthens that belief in my mind.

Expect the Verizon iPhone to sell millions of copies. Arguably the second most expensive component that Apple does not already own/manufacture is the communications chip, with the first being the screen. Apple owning the company that is going to develop the communications chip helps keep Apple bucks in their coffers.

This seems like a no-brainer for Apple, to me.
post #26 of 50
Quote:
Originally Posted by nbcbubba View Post

We all know a Verizon iPhone is coming and this acquisition further strengthens that belief in my mind.

Expect the Verizon iPhone to sell millions of copies. Arguably the second most expensive component that Apple does not already own/manufacture is the communications chip, with the first being the screen. Apple owning the company that is going to develop the communications chip helps keep Apple bucks in their coffers.

This seems like a no-brainer for Apple, to me.

Your point seems to be that Apple is buying Infineon in order to keep control of the development of those components and that this then makes a Verizon iPhone more likely....

Except Apple isn't buying Infineon. Intel is. Not saying you are wrong, just that your argument doesn't seem to make a lot of sense.

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post #27 of 50
Intel ceased to be an innovative company years ago. They missed the boat bigtime on low-power processors. Now, in an attempt to play catch up, they are buying their way into new markets.
post #28 of 50
Quote:
Originally Posted by Mac_Keeper_Fan_Mod View Post

1.4 billion
So why didn´t Apple bought it in the first place? 1.4 Billion is just a fraction of Apple´s capital.

Are they planning on manufacturing their own baseline controllers?

because they will never keep all the other customers that use infeneon chips
post #29 of 50
Quote:
Originally Posted by karmadave View Post

Intel ceased to be an innovative company years ago. They missed the boat bigtime on low-power processors. Now, in an attempt to play catch up, they are buying their way into new markets.


Intel's CPU's were always worse than Sun's and PowerPC until around 2000. they got 32 and 64 bit capabilities long after the competition did as well as energy efficiency. they were cheap and good enough for the desktop. same as ARM is cheap and good enough for a phone
post #30 of 50
Quote:
Originally Posted by Tulkas View Post

Your point seems to be that Apple is buying Infineon in order to keep control of the development of those components and that this then makes a Verizon iPhone more likely....

Except Apple isn't buying Infineon. Intel is. Not saying you are wrong, just that your argument doesn't seem to make a lot of sense.

Ahhh, yes, I did misread that! Thanks.

Reading comprehension: -1
post #31 of 50
Quote:
Originally Posted by Hudson1 View Post

Are there any reports that Apple uses truly customized radio processors for Macs, iPhones, and iPads? My assumption has been those are essentially off-the-shelf parts they've buying from Infineon. If true, this deals matters little if anything to Apple.


i've read that due to contractual obligations the firmware is custom coded for each customer. which makes sense when looking at the growing problems that the iphone has had

with intel buying infeneon expect to see the firmware being commoditized as well


i think the biggest change will be that come 2012 or 2013 we'll see LTE chips sold in packages on the Atom CPU die. if you want separate silicon expect to pay a premium price.

it's the way Intel and MS operate. have the end product be a commodity and take the biggest chunk of the value out of it.
post #32 of 50
Intel like Microsoft has failed miserably at getting a strong foot hold into the mobile communications as well as the media markets.

This purchase and I assume there maybe more in the future is Intel attempt to get into these markets. Many companies are purposely staying away form Intel and Microsoft since they is no bargaining power with them.

Remember Apple going to Intel was not about putting intel inside but more about apple getting away from the PPC. Apple does not care about Intel and if it made sense they would not do business with them.

If Intel makes an issue of this with Apple, there are choices Apple can make, grant it Infineon is independent of the communication chip makers, but there are other choice and Apple has track record of dumping one company over another.

Intel also made announcement to buy TI cable modem business and Mcafee which that want to include security features in to their processors, specifically mobile processors.

Rest assure Intel will get board and dump or shut down these business like they have done ever time in the past when they realize it is not selling more processors.
post #33 of 50
Quote:
Originally Posted by sheff View Post

I wonder if Intel will try to use this as leverage to keep Macs running Intel. After Apple used ATI cards in most (all?) of the new macs there has been talk of moving over to AMD, which I mostly support (nothing against intel I just think AMD would have more time to customize their chips for apple then Intel which already has big customers.) Or perhaps intel is trying to keep apple as a customer even if they do leave for AMD.

Of course this could also mean that Intel wants to integrate wireless right into their Atom platform to make it more attractive for cell phone makers. I guess we'll have to wait and see.

AMD chips aren't anywhere near as good as Intel's CPU offerings. And AMD can't produce the volumes required anyway.
post #34 of 50
x86 was and is one of the worst architectures in the market. I am glad that Intel has problems in the mobile market. I really hope x86 dies... (never happens since windows source code is based on x86)

There are other companies that provide wireless solutions like Intersil, TI or STMicroelectronics and Analog Devices. None of them offer a complete product set like Infineon though!

I do not think, personal opinion, that Apple really want to invest in this part of the market. The return is very low, you are better off buying it off the shelf!
post #35 of 50
Quote:
Originally Posted by al_bundy View Post

Intel's CPU's were always worse than Sun's and PowerPC until around 2000. they got 32 and 64 bit capabilities long after the competition did as well as energy efficiency. they were cheap and good enough for the desktop. same as ARM is cheap and the most power efficient for a phone

There, fixed it for you. Most of Intel's power savings will have some basis/foothold in ARM's designs, seeing as that was the direction ARM took when Intel went for raw power (consumption).
post #36 of 50
Quote:
Originally Posted by PaulMJohnson View Post

IF they do that it would be one hell of a technical achievement. The RF portion of such a device creates a hell of a lot of electrical noise, which a digital processor just can't cope with, so trying to put them together in the same package (let alone the same piece of semiconductor material), is incredibly hard to achieve.

I don't know for sure about Infineon, but most RF devices are made using Gallium Arsenide as the base material. Processors and the like use silicon. Whilst you can make a processor on GaAs, it's not nearly as cost effective as using silicon, since GaAs is more expensive to buy in the first place, and is much more difficult to manufacture on.

Nailed it..... The first thing intel could have done was to integrate it's junk Wifi with Processor, which until now they haven't. There are far more complex problem like antennae placement, routing, noise etc.., which it needs to solve before it can do something like this.
post #37 of 50
So are they going to rename the racetrack on Sears Point Road to Intel Raceway?
post #38 of 50
Weird Al was right: it's all about the Pentiums.

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post #39 of 50
My concern is that Intel will try to bundle the wireless tech with their Atom processors, and the possible consequences to Apple. I can only believe (hope) that Apple has suitable alternatives if this becomes a problem.
post #40 of 50
Quote:
Originally Posted by iBill View Post

My concern is that Intel will try to bundle the wireless tech with their Atom processors, and the possible consequences to Apple. I can only believe (hope) that Apple has suitable alternatives if this becomes a problem.

See my comments above - I don't think that is technically possible (at least, not without being fantastically expensive).
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