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Intel aims to push beyond phones with 5G infrastructure deals

Mon 25th February, 2019 5:00am
By Stephen Nellis
    Feb 25 (Reuters) - Intel Corp  INTC.O  on Monday announced
new chips and partnerships that it hopes will persuade its
investors that the billions of dollars in research and
development that it has poured into 5G networking technology
will pay off.
    Intel, the world's second-largest chip maker by revenue, got
into the wireless data business with its acquisition of German
modem maker Infineon in 2011. Its sole major modem customer is
Apple Inc  AAPL.O , whose iPhones feature Intel modem chips to
connect to mobile data networks.
    But the cutthroat modem business, where Intel competes
against rivals such as Qualcomm Inc  QCOM.O  and MediaTek Inc
 2454.TW , has lower margins than Intel is accustomed to making
on its flagship processor chips that go into personal computers
and data centers. 
    But Bob Swan, Intel's chief executive, said Intel's future
in 5G networks, which are expected to roll out this year and
next and be much faster than current 4G networks, extends beyond
selling modems to phone makers. 
    Intel plans to also sell modems to automakers for use in
connected vehicles, as well as to manufacturers for use in
connecting industrial equipment. And Intel also plans to land
its other chips - including processors and the so-called
programmable chips it gained by acquiring Altera Inc in 2016 -
in a variety of networking gear, he said.
    "Where investors have been most anxious is, we were catching
up for a while. Catching up, in their minds, means not making
any money," Swan said at a press event in Palo Alto, California
last week ahead of the Mobile World Congress conference being
held in Spain this week. "Now we're at a stage where we believe
we have products that are as good as anybody in the industry's
as we move into 5G."
    On Monday at the conference, Intel said it had reached a
deal for network gear makers Fibocom Wireless Inc  300638.SZ ,
Arcadyan Technology Corp  3596.TW  and others to include Intel
modem chips in so-called modules and gateways that will help
industrial equipment connect with 5G networks. The company also
introduced new programmable chips that will compete against
Xilinx Inc  XLNX.O , which in its most recent quarter saw a
revenue boost from 5G deals.
    Intel is also aiming to sell versions of its flagship
processors for use in 5G base stations, which help carry mobile
phone signals back to core networks and said it reached deals
with Ericsson  ERICb.ST  and ZTE Corp  000063.SZ  to use Intel
processors in their 5G networking gear. 

 (Reporting by Stephen Nellis in San Francisco; Editing by Lisa
Shumaker)
 ((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
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