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Intel buys ST-Ericsson’s GPS chip division, first acquisition under Intel’s new CEO

by On May 29, 2013
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With PC sales continuing to decline, the mobile market is becoming increasingly important for Intel. The company already has several Android and Windows-based mobile devices that run on its x86 chips, and could even soon be adding the Samsung Galaxy Tab 3 10.1 to that list. All of this is certainly a step in the right direction, but if Intel really wants to compete against more established mobile chipset companies like Nvidia and Qualcomm, it is going to need to take its game to the next level.

With that in mind, Intel has officially announced it has bought the satellite navigation chip business unit of ST-Ericsson.

This purchase is Intel’s first acquisition since the start of its new CEO, Brian Krzanich, who has currently only been on the job for twelve days. So how much did the purchase set Intel back? The company isn’t disclosing the terms or costs, but ST-Ericsson did report that the sale of the business unit would reduce its annual cash need by roughly $90 million.

In other words, ST-Ericsson was more than happy to unload this money-losing endeavor. It might seem odd that Intel would want to buy something that is losing money quickly, but it’s about the long-term opportunity that this could open for the company. ST-Ericsson already provides chips for both satellite navigation systems and smartphones, something that Intel could use to its advantage down the road as it continues its attempts to compete with ARM-based rivals.

In the deal, Intel will acquire 130 employees across various locations that currently work for ST-Ericsson’s sat-nav chip division and that they will become part of Intel’s mobile chip unit ran by Herman Eul.

What do you think of the acquisition? Could Intel eventually become a bigger play in the mobile world or will the company always play second fiddle to ARM and its licensees?

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Via: Android Authority

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