June 27, 2006
Intel on Tuesday announced that Marvell Technology Group will acquire its communications and application chip business for about $600 million.
Intel's sale of its chip business for mobile handhelds and cell phones, which had been rumored in recent months, is intended to enable the company to get back to basics. The sale will also remove a business that struggled to take off and has weighed down the company's overall financial performance, despite billions of dollars in investments.
As part of the Marvell deal, Intel is selling its PXA9xx communications processor, code-named Hermon, which is found in BlackBerry 8700 devices but has not been widely adopted by other handset makers and wireless carriers.
Hermon is the second effort produced by Intel's attempt to enter the cellular handset business, which is dominated by Texas Instruments. It is a combination of an application processor, a communications chip for cellular networks and flash memory. The first chip, code-named Manitoba, was a flop. Only one phone was ever released to the public featuring the chip, and only then after a significant overhaul of the design. Hermon at least captured the high-profile BlackBerry design win, but Intel had few other successes to tout in this market.
Intel has had better luck with its PXA27x application chip, code-named Bulverde, which is used in Palm Treo smart phones, Motorola's Q and other devices, the company said. But that chip is also heading off to Marvell.
WAS THIS A BIG MISTAKE THAT HAS COST INTEL ITS SUCCESS IN THE MOBILE CHIP MARKET?????
MRVL is a $4bn company, doesn't look a mistake to me. The money in ARM is not in making the chips but in making the products. Intel actually makes as many ARM chips as anyone as it never sold the Xscale network chips to Marvell which is why it is the biggest contributor to ARM revenue.
Thank you for your knowledgeable response. I have owned many tech stocks since I started investing in 1997. From 1997 to 2000 you couldn't lose because the tech bubble was in full bloom. Now it seems all the big tech companies are paying dividends and are "blue chip" stocks. So I try to figure out what are the best tech companies to own. I currently I own Intel and Broadcom. Hard to not buy more Intel and this price. I have bought shares of Intel at $18-$23. So I am a bit underwater right now; but hoping Intel will break free of this negativity surrounding it.