PB, Article...Intel keys in on wireless endgame...
January 3, 2000
Ken Popovich
Intel Corp.'s ongoing battle with Advanced Micro Devices Inc. for PC processor speed suprem acy has garnered much recent attention, but behind the scenes Intel has been reshaping its business strategy around a new market: communications chips.
Late last month, Intel President and CEO Craig Barrett announced the formation of a Wireless Communications and Computer Group to oversee one of Intel's most prized recent acquisitions: DSP Communications Inc., a leader in cell phone technology.
As part of an increasing focus on new high-tech growth markets, Intel has made in just over a year about $7 billion in acquisitions involving communications and network chip technology.
In particular, the Santa Clara, Calif., chip maker aims to tap into wireless communications, an explosive market fueled by the popularity of mobile phones and the expected surge in wireless information appliances.
"You're seeing Intel looking beyond just the PC industry at some major new growth markets, while maintaining strength in the PC industry," said Intel spokesman Tom Waldrop.
With DSP Communications, which Intel purchased for $1.6 billion in October, the company now is positioned to offer a broad array of products to the wireless communications market, Waldrop said.
DSP, of Cupertino, Calif., is a leading developer and supplier of reference designs, chip sets and software for mobile phone manufacturers.
Its customers include Kyocera Corp., Lucent Technologies Inc., Motorola Inc., NEC Corp., Pioneer Corp., Sanyo Electric Co. Ltd. and Sharp Corp.
"Putting it all together, we'll be able to offer flash memory, chip sets, the systems engineering and software that are needed for those devices, and also the processors that we have in our arsenal now," Waldrop said. Those offerings include StrongARM, a high-performance, low-power processor used in handheld devices, along with embedded Intel Architecture processors.
Just how important is this new market to Intel?
"This cellular phone thing is huge," Waldrop said. "You're talking up to 200 million cell phones per year. Maybe the price of the silicon that goes into an individual cell phone doesn't match the price of a PC processor, but the volumes are huge."
Shift in focus
While Intel remains committed to maintaining its leadership in the PC processor market, it's clear the chip giant is undergoing a not-so-subtle shift in its business focus.
"What you're seeing here, with this formation of an organization that focuses on wireless and cellular, is a concrete manifestation of just how important we think the wireless market is," Waldrop said.
|
