Intel wants to push beyond phones with 5G infrastructure offers

FILE PHOTO: the Intel logo is pictured during preparations at the CeBit computer fair, will open its doors to the public on 20 March, on the exhibition grounds in Hanover, Germany, March 19, 2017. REUTERS/Fabian Bimmer

(Reuters) – Intel Corp on Monday announced new chips and a partnership that it hopes will convince investors that the billions of dollars in research and development that has poured into 5G network technology will pay.

Intel, the world’s second largest chip maker by revenue, came in the wireless data business with the acquisition of the German modem maker Infineon in 2011. The only major modem customer is Apple Inc, whose iPhones are equipped with Intel modem chips to connect to mobile networks.

But the murderous modem company, where Intel competes against rivals such as Qualcomm and MediaTek Inc Inc, has lower margins than Intel is used to, to make its flagship processor chips in 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 and next year and much faster than the current 4G networks goes further than the sales of modems, phone makers.

Intel plans to also sell modems to automobile manufacturers for use in connected vehicles, as well as the manufacturers for use in connecting industrial equipment. And Intel also plans to make the country of the other chips, including processors, and the so-called programmable chips, gained through the acquisition of Altera Inc. in 2016 – in a variety of networking gear, he said.

“What investors are most worried about is, we were catching up for a while. Catching up, in their minds, means no money,” Swan said at a press event in Palo Alto, California last week for the Mobile World Congress conference is held in Spain this week. “We are now at a stage where we believe that we offer products that are as good as anyone in the industry as we are in 5G.”

On Monday at the conference, Intel said it was a deal for network gear makers Fibocom Wireless Inc., Arcadyan Technology Corp. and others to take Intel modem chips in so-called modules and gateways that will help industrial equipment connect to 5G networks. The company also introduced new programmable chips that will compete against Xilinx Inc., which in its most recent quarter was a revenue boost of 5G deals.

Intel is also focused on selling versions of its flagship processors for use in 5G, base stations, that help in the perform of mobile telephone signals back to the core networks, and said it reached deals with Ericsson and ZTE Corp. use of the Intel processors in their 5G networks gear.

Reporting by Stephen Nellis in San Francisco; Editing by Lisa Shumaker

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