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Intel reports stellar second quarter

The tech industry shows further signs of a turnaround as US chip giant Intel reported its best ever quarter, with revenues rising 34 per cent year on year to reach $10.8bn in the second quarter of 2010. Net income for the same period was up 175 per cent year on year to $2.9bn.

The good fortune was largely down to strong demand for desktop processors in the corporate space but Intel said Atom microprocessor and chipset revenue hit $413m during the quarter, up 16 per cent sequentially.

However the US firm is known to have further designs on the mobile market and was this week rumoured to be sizing up Infineon’s wireless assets. Intel’s assets in the mobile market consist of its Atom business, which targets portable devices and smartphones. However, the semiconductor giant lacks cellular chipset assets including basebands and RF chips and Intel is presently understood to have its eye on Infineon’s wireless business, which would complement its Atom business.

But according to Malik Kamal Saadi, principal analyst at Informa Telecoms & Media, the acquisition, if it materialises, could be interpreted in two ways: Firstly Intel could be reviewing its strategy in the mobile market away from WiMAX in favour of adopting cellular technologies which would enable the company to compete more aggressively in the mobile and portable market. The acquisition of Infineon’s wireless business could help Intel to serve all segments of the mobile market and could enable the company to position itself as a key mobile chipset supplier competing with the likes Qualcomm.

Alternatively, Intel could be mainly interested in Infineon’s HSPA/LTE baseband assets that currently power a number of successful smartphones including Apple’s iPhone. These assets, aligned with Intel’s Atom mobile business, could enable the company to offer more integrated chipsets similar to Snapdragon offered by Qualcomm. This could also be an opportunity for Intel to convert a number of its OFDM patent assets used so far for WiMAX to LTE. This wealth combined with Infineon’s know-how, could enable the company to better position itself in the LTE IPR landscape and create innovative LTE basebands for powering next generation connected devices.

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