So the rumors of the last few days have proven true, and Intel is buying McAfee. But the immediate question is why. Intel is a leading chip maker, McAfee a security software company. One explanation going around on Twitter is that Intel’s CEO said, “We need anti-virus around here. Go buy me some!” and someone misunderstood.

Okay, that’s not likely. Actually the official news release – which, interestingly, comes from McAfee rather than Intel – provides a broad hint – chip-level security for mobile devices. Intel is very conscious that mobile devices of all kinds are a huge growth market for its products, and that they require a very different set of chips than do larger computers. Intel has already invested heavily in both lower energy processing and connectivity. This purchase, the release says, “elevates focus on security” to the level of these areas, and in the next sentence ties that to “Intel’s mobile wireless strategy.” Certainly Intel anticipates a coming malware attack on mobile systems as those become increasingly popular and capable, and it is moving to get ahead of this problem by purchasing a leading computer security systems developer.

Overall I see this as a positive development. Hardware security is always stronger than software. And given the increasing sophistication of the threat, and in particular the appearance of root kits, which boot before the full operating system and therefore the security software, a hardware-based solution is appropriate. The one thing that comes online before the microcode and a rootkit is the chipset itself.

I certainly hope (and expect) to see chip-level security appear in future Windows laptops and desktops as well as handheld devices. Windows has been under attack for a long time, and while its technology, and the third-party software security suites from the various leading vendors, are strong, they need all the help they can get. I am concerned that Intel implement its hardware security to work equally well with the software security suites of the different vendors rather than trying to give McAfee an unfair advantage in the software security market.

On the mobile level, this is also important because of the issues of handheld systems with small batteries in particular. Hardware security can be designed to use less power than software, and of course it does not use limited storage and memory resources. And it can run in background as long as the devices is on, even on devices that cannot run concurrent applications, and even when the device is in sleep mode, since it does not depend on the OS.

Looking at this announcement from the standpoint of the processor marketplace, it raises the question of whether this signals a trend. Will other chip manufacturers now go shopping for security vendors? Are they doing so already? Certainly having a hardware security solution in its chipset will give Intel a significant advantage in the market. And it is not the only chip manufacturer competing for business in the mobile device marketplace. Do not be too surprised if Intel’s competition have their own security announcements in the near future.

Finally, what else is Intel likely to buy? Certainly this purchase shows the chip manufacturer’s financial strength. The $7.68 billion total bill for McAfee is breathtaking, particularly after two years of recession. Obviously Intel has deep pockets and is not afraid to use that money to expand its strategic reach.