Intel on Monday stepped up its Internet of Things (IoT) offensive by signing an agreement to acquire Lantiq, a smart home broadband chip maker.
The move accelerates Intel's IoT march, which contributed $2.1 billion in sales in 2014, up 19 percent from its $1.8 billion in 2013.
Intel said combining its own cable gateway business with Munich, Germany-based Lantiq's technology would pave the way to "new home computing experiences and enable consumers to take advantage of a more smart and connected home."
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"It makes sense for Intel to make this decision," said Todd Swank, senior director of product marketing at Equus Computer Systems, a Minnetonka, Minn.-based system builder. "Companies are focusing on streaming connected services in the home -- just look at Google's investment with Nest. It's certainly a valuable investment. Consumers don't know what they want yet with Internet of Things and it's hard to imagine what this will turn into, but they do want something that makes everything automated and makes their lives easier."
For the Santa Clara, Calif.-based semiconductor manufacturing company, the acquisition represents a move from its traditional desktop and server space into the cable residential gateway market, particularly through IoT smart routers and digital subscriber lines, said Swank.
Lantiq could facilitate that move through its broad digital home-geared semiconductor product portfolio, offering over 2,000 patents related to broadband communications.
Intel has predicted there will be more than 800 million broadband-connected households worldwide by 2018. The chip giant is working with OEMs, service providers and applications companies as part of its IoT drive.
"Intel is traditionally strong in desktops and servers, but as the Internet of Things becomes more popular, it makes sense for Intel to make moves to become engrained in this space. It's smart to invest in devices promoting interconnectivity," Swank said.
Terms of the transaction were not disclosed but, according to a release, the transaction is expected to close in approximately 90 days.
The deal comes five years after Lantiq, once part of German chip giant Infineon, was acquired by private equity firm Golden Gate Capital.
"It's an opportunity for us to expand on our residential gateway business and broaden what we offer," an Intel spokesperson told CRN. "As everything in the home becomes connected and smart, home gateways can be a strategic hub for consumers. Lantiq brings excellent technology and a talented team to this effort."
PUBLISHED FEB. 2, 2015
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