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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 49
    al_bundyal_bundy Posts: 1,525member
    let's see if Intel makes customers put Intel Inside stickers on their phones
  • Reply 2 of 49
    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.
  • Reply 3 of 49
    MacProMacPro Posts: 18,367member
    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?
  • Reply 4 of 49
    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
  • Reply 5 of 49
    hudson1hudson1 Posts: 800member
    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.
  • Reply 6 of 49
    MacProMacPro Posts: 18,367member
    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.
  • Reply 7 of 49
    hudson1hudson1 Posts: 800member
    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?
  • Reply 8 of 49
    solipsismsolipsism Posts: 25,726member
    Infineon is down over 3% for the day. I would have thought this would have boosted the stock?s 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.
  • Reply 9 of 49
    myapplelovemyapplelove Posts: 1,515member
    oops, that may hinder the swith to amd...
  • Reply 10 of 49
    quadra 610quadra 610 Posts: 6,744member
    Ok.



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



    Interesting to see what Intel will do with it.
  • Reply 11 of 49
    aplnubaplnub Posts: 2,591member
    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.
  • Reply 12 of 49
    sheffsheff Posts: 1,407member
    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.
  • Reply 13 of 49
    aaarrrggghaaarrrgggh Posts: 1,583member
    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?
  • Reply 14 of 49
    MacProMacPro Posts: 18,367member
    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.
  • Reply 15 of 49
    MacProMacPro Posts: 18,367member
    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.
  • Reply 16 of 49
    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!
  • Reply 17 of 49
    rot'napplerot'napple Posts: 1,839member
    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?!
  • Reply 18 of 49
    tulkastulkas Posts: 3,754member
    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.
  • Reply 19 of 49
    MacProMacPro Posts: 18,367member
    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?
  • Reply 20 of 49
    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?
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