Intel hangs up mobile phone division with sale to Marvell

Intel has given up on efforts to establish itself in the mobile phone market and agreed to sell its communications and applications processor business to telecom chip maker Marvell Technology for US$600million.

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By  Dylan Bowman Published  July 9, 2006

Intel has given up on efforts to establish itself in the mobile phone market and agreed to sell its communications and applications processor business to telecom chip maker Marvell Technology for US$600million. The chip giant has found it difficult to gain a dominant position in the market in the same way it has in the PC sector and the move has been seen as the first sign of the internal restructuring announced by company CEO Paul Otellini back in April. Otellini said then that the firm was planning to slash US$1 billion in spending from its budget this year and embark on its biggest ever cost-cutting review. Intel stated the sale would allow it to focus its investments on core businesses such as processors and emerging technologies for mobile computing, including WiFi and WiMax. “The communications and application processor segments continue to present an attractive market opportunity, and we believe this business and its assets are an optimal fit for Marvell,” said Sean Maloney, Intel Mobility Group general manager and executive vice president. “We have a long history of working closely with Marvell and believe it has the ability to grow the business while maintaining customer commitments,” Maloney added. Intel’s comms and applications processor business develops and sells processors based on its Xscale technology for handheld devices, and powers handsets from vendors such as Research in Motion. The business employs around 1,400 staff and Intel said it expected the majority to become employees of Marvell. “Marvell and Intel have built a very strong relationship over the past six years and we are very excited to work closely with Intel in transitioning this business into Marvell,” commented Sehat Sutardja, Marvell chairman, president and CEO. “This transaction presents Marvell with a tremendous opportunity to become a long-term leading supplier in the cell phone and consumer electronics market segments,” he added. Intel said it intended to continue manufacturing products currently sold by its comms and applications processor business for handheld devices and embedded applications, and to manufacture products that were being designed into upcoming devices until Marvell arranged other manufacturing resources.

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