Intel Hires Financial Adviser To Sell Home Connectivity Unit: Report

'It has to be a crowded market because you're essentially competing against the Broadcoms and the Qualcomms of the world,' one solution provider says of Intel's reported plan to sell its home connectivity unit that supplies chips for routers and gateways.


Intel reportedly is looking to sell its home connectivity business that supplies router and gateway manufacturers with Wi-Fi-enabling chips.

Bloomberg reported that the Santa Clara, Calif.-based chipmaker has enlisted a financial adviser to assist with the sale of the business, which competes with Qualcomm and Broadcom. The news organization cited unnamed sources familiar with the matter.

[Related: Solution Providers: $1B Apple-Intel Smartphone Modem Deal Undermines Qualcomm]

Sponsored post

Intel declined to comment on the report.

This would mark the second business unit put on the market by Intel CEO Bob Swan since he was appointed to the role in January. Most recently, the semiconductor giant sold a majority of its smartphone modem business to Apple for $1 billion, putting an end to the company's 5G smartphone ambitions.

The home business unit, whose portfolio ranges from systems on a chip and Wi-Fi chipsets to Ethernet and voice products, brings in about $450 million in annual revenue, according to Bloomberg.

Michael Oh, president and founder of TSP, a Cambridge, Mass.-based smart home solution provider, said it's possible Intel is looking to get out of a business focused on commodity hardware where it's difficult to differentiate enough against competitors.

"I think it's a sensible move for them in the sense that if I was running Intel, this doesn’t make any sense," he said, pointing to how the home connectivity unit's revenue is a tiny fraction of Intel's largest businesses, such as its $37 billion PC chip business.

Oh said Broadcom and Qualcomm have created tough competition in the home connectivity space, especially in light of the former's deal to supply chips for Comcast's Xfinity X1 platform.

"Nothing on this website about their connected home says to me they have found the blue ocean of new opportunities," he said.

While Intel did ink a new deal with Comcast in January to provide chips for home connectivity devices that enable 10-Gbps broadband and Wi-Fi 6, it's probably not enough to push the needle in in a way that puts the unit on the same level of Intel's growth businesses, according to Oh.

"It has to be a crowded market because you're essentially competing against the Broadcoms and the Qualcomms of the world," he said.