Intel just spent $375 million to acquire 1,700 patents for wireless networking technology from Interdigital. The patents should help Intel gain a foothold in the mobile device market that ARM currently dominates. Intel plans to integrate it newly acquired 3G and 4G LTE intellectual property and its Atom microprocessor into smartphones and tablets.
Intel began its journey to becoming a player in the mobile space by purchasing Infineon Wireless in late 2010. Last year Intel officially entered the mobile space with its Atom chip. Intel has spent much of this year acquiring intellectual property, purchasing both InfiniBand from Qlogic and high-performance interconnect assets from Cray to bolster its portfolio. Now Intel is focusing on 3G, LTE and Wi-Fi technology patents from Interdigital.
Intel’s Journey to Mobile
Intel has led the personal computer processor market for years, and it appears the company has decided it can perform a similar feat in the mobile market. At this year’s Mobile World Congress in February the company announced it was launching several new versions of its mobile chip. Intel also revealed new partnerships with companies in China and India to develop a low cost smart phone. Not everyone shares Intel’s confidence in its ability to break into mobile. A senior analyst at investment firm Piper Jaffray referred to Intel’s mobile strategy as ‘ill-advised’ citing the company’s previous failures as evidence.
Intel clearly has some challenges to overcome in the mobile market. The company became complacent in its role as a market leader. Intel failed to adapt to the growing importance of mobile in time, and now, it’s racing to catch up. However, the efforts are a little too late for some Intel customers. In January 2011, Intel’s long time BFF, Microsoft announced Windows 8 tablets would use ARM to avoid the issues with poor battery life that Intel’s power hungry chips would cause. Intel’s relationship with Microsoft was not enough to make the Seattle giant ignore the shortcomings of Intel’s mobile chips. Unfortunately, excessive power consumption is not the only concern with Intel’s chips. Intel’s chips are more expensive than ARM chips, which makes them less attractive to some potential customers.
Intel is working to change the industry’s perceptions. The company made a significant investment in lowering the power needs of its Atom chip. The company wants to deliver mobile chips with fast performance and low power needs. Intel may be struggling now, but the company is 12 times the size of ARM and has enormous resources to invest. Nobody should discount the chip maker’s ability to eventually into the mobile leaders’ circle.