Tuesday, April 7th 2020
Intel Sheds Extra Weight: Selling Home Gateway Division Assets to California-based MaxLinear for $150 Million
Intel is looking to further consolidate its product and services portfolio through the sale of its Home Gateway Platform Division to California-based connectivity infrastructure provider MaxLinear for $150 million. The move comes in the wake of CEO Bob Swan's efforts to reduce Intel's expenses on markets that aren't showing the needed returns to justify the increased investment in engineering and distribution - as with everything, there is associated opportunity cost with every product division that isn't up to the task. And in this case, the task was always daunting, with Intel's Home Gateway Platform Division (whose efforts center around system-on-a-chip (SoC) products for home gateways, Wi-Fi access points and Ethernet) competing with the likes of Qualcomm and Broadcom.
This comes after Intel already sold its cellular modem business to Apple on the rationale that it wouldn't "have provided attractive returns." An Intel spokesperson clarified that the sale of the Home Gateway Platform Division represents "a majority of the assets from Intel's Home Gateway Platform Division but not all of them." Intel expects most jobs directly impacted to find alternatives under the new MaxLinear umbrella, or though an internal Intel reshuffling. Intel is choosing to refocus on high-margin markets over which it already has ascendance, instead of trying to diversify - in this case - towards the cutthroat mobile and home gateway markets.
Source:
CRN
This comes after Intel already sold its cellular modem business to Apple on the rationale that it wouldn't "have provided attractive returns." An Intel spokesperson clarified that the sale of the Home Gateway Platform Division represents "a majority of the assets from Intel's Home Gateway Platform Division but not all of them." Intel expects most jobs directly impacted to find alternatives under the new MaxLinear umbrella, or though an internal Intel reshuffling. Intel is choosing to refocus on high-margin markets over which it already has ascendance, instead of trying to diversify - in this case - towards the cutthroat mobile and home gateway markets.
5 Comments on Intel Sheds Extra Weight: Selling Home Gateway Division Assets to California-based MaxLinear for $150 Million
Intel bought a company with know-how and expanded it's networking and IoT lineup.
But Intel only targets enterprise clients.
So they wrapped all the dead weight (unneeded Lantiq's IP and employees - including backoffice team: accountants and whatever) into a nice package called "home gateway division" and got almost half of the initial investment back.
Moreover, given that all sold designs are made in Intel's fabs, they'll probably remain the sole manufactrer anyway (it could be secured in the deal as well).
These are the products that they're currently offering that are based on Lantiq tech.
www.intel.com/content/www/us/en/connected-home/anywan-soc-grx350-grx550-brief.html
As you can see, it's for consumer products.
This product range has been a dumpster fire for Intel, as they've struggled to find customers for them and they've even offered to invest in companies that were willing to make products based on the chips. I know this, because I used to work at one of those companies.
Their pricing is also way off and simply not competitive in terms of the features on offer.
You base your conclusions on what you see, I based mine on what I know in this case.
They most likely made a much larger loss than $195 million if you take into account that they've owned Lantiq for five years by now and in those five years, there have been a handful of consumer devices using these chips. A lot of the "new" products were also delayed by a year or three, so there was nothing to entice new customers with. Some products never even launched. I know this, because I wanted to use one of the chips in an enterprise level product over three years ago and I spoke to Intel about it.
But hey, you know best...