Intel has made another move to become a dominant player in the Internet of things, agreeing to buy Lantiq, which makes smart home and broadband chips.
The deal, announced Feb. 2, will add another piece to Intel's growing portfolio of technologies for the booming Internet of things (IoT), and will help the chip maker expand its capabilities in such products as residential gateways and IoT smart routers that help connect devices in the home to the Internet and to each other. Like most tech vendors, Intel sees a significant growth opportunity in a market that Cisco Systems officials expect to grow from 25 billion devices worldwide last year to 50 billion by 2020.
Those connected devices will include everything from tablets and smartphones to industrial systems, cars and sensors for smart cities. Home appliances and security systems, along with other residential devices, also will be an important part of the IoT.
"By 2018, we expect more than 800 million broadband connected households worldwide," Kirk Skaugen, senior vice president and general manager of Intel's Client Computing Group, said in a statement. "The combination of our cable gateway business with Lantiq's technology and talent can allow global service providers to introduce new home computing experiences and enable consumers to take advantage of a more smart and connected home."
No financial details were released.
Intel in 2013 created a business unit for the Internet of things, and it brought in $2.1 billion in revenue, growing 19 percent from 2013. The company also has created the Quark family of small and highly power-efficient chips aimed at the IoT, and has launched the Galileo, Edison and—most recently—Curie IoT development platforms.
Intel also last year helped found the Open Interconnect Consortium (OIC), one of several industry groups aimed at developing an open software framework to enable the billions of devices that will make up the Internet of things to more easily communicate with each other.
Other chip makers also are pushing their way into the IoT. Qualcomm has been rapidly expanding its capabilities, releasing a development kit and buying chip maker CSR in the fall, while Broadcom has rolled out its WICED (Wireless Internet Connectivity for Embedded Devices) platform. Qualcomm also was a founding member of the AllSeen Alliance, which is a rival of the OIC.
Samsung last year bought IoT startup SmartThings for $200 million, and at the 2015 Consumer Electronics Show last month, said that by 2017, all of its televisions will be IoT devices. Within five years, all of Samsung's hardware will be IoT-enabled, officials said. The company also is investing $100 million in its IoT developer program.
The deal for Lantiq, which is expected to close within 90 days, also will help Intel bulk up its capabilities in gateways for such markets at DSL, Fiber, Long-Term Evolution (LTE) and retail businesses.
The company, based in Munich, was part of Infineon until the chip maker sold the business in 2009 to equity firm Golden Gate Capital. Company officials said Lantiq's DSL technology is being used by more than 100 network operators worldwide, and that the company has more than 2,000 broadband communications patents. According to CEO Dan Artusi, Lantiq is a good match for Intel.
"Intel and Lantiq share a common vision about the evolution of the connected home and the intelligent network," Artusi said in a statement. "Together, we can drive the transformation of the broadband customer premises equipment (CPE) as it becomes a smart gateway that connects an increasingly diverse roster of devices and services in the home."