INSIDE MOBILE: Why Intel's Acquisition of McAfee Is Important for Mobile
INSIDE MOBILE: Why Intel's Acquisition of McAfee Is Important for Mobile
You have to hand it to firms such as Intel and Microsoft. When they are determined to succeed in a new market, they try and try again-and if that doesn't work, then they go out and buy their way into the market. Last week, Intel announced the acquisition of McAfee, a successful security software company, for $7.68 billion. This acquisition may play an important part in Intel's plans to become a major player in the wireless handheld market-something that they haven't yet been able to achieve despite a lot of effort.
This is the second in what is likely a series of actions Intel is making to become a major player in wireless handhelds. The first strategic announcement was made on February 15th of this year at the GSMA Mobile World Congress in Barcelona. At that time, Intel and Nokia announced that they would work together to support a new Linux-based operating system called MeeGo (which merges Intel's prior Moblin efforts with Nokia's Maemo). An earlier announcement by Nokia suggested that it intended to possibly use Intel's processors in some future Nokia mobile devices.
If Intel was going to acquire a security software company, why didn't they acquire Symantec, clearly the market leader? That might have made sense but it would definitely have been a lot more expensive. And, since Intel plans to embed much of McAfee's security software into future processor chip offerings, Intel likely took the lower cost route to the same destination.
The reason that the McAfee acquisition makes sense for Intel in the wireless handheld market is simply because security is going to become more and more important to both enterprise customers and consumers.
Mobile Commerce Requires Security
Mobile commerce requires security
Think about what it's going to be like to use your smartphone or tablet to manage mobile commerce. You'll be checking bank balances, transferring funds, buying stuff online, using coupons, etc. You'll eventually see Near Field Communication (NFC) chips added to wireless handheld devices so they can be used as a mobile wallet in retail stores. And you'll be storing thousands of songs, photos and videos in these devices as well. Wireless handhelds are going to hold a lot of personal information. And, when that happens, security is going to be a very important part of the entire user experience.
For example, what if someone picks up your wireless handheld and starts transferring funds to their account? Or what if they buy things? Or what if someone simply extracts the information off your wireless handheld? Or what if you lose your handheld? Or what if it's stolen? As more important information resides on your handheld, the more valuable the wireless handheld becomes to you. At this point it becomes very important to add security precautions to prevent unauthorized access or use.
In order to protect your wireless handheld device, you'll need to have a combination of password protection, encryption and biometrics (such as fingerprint verification so each mobile commerce transaction can verify it's really you and not someone else claiming to be you). Perhaps Intel will buy a biometric security firm such as UPEK and integrate the fingerprint verification sensor and cursor controller into millions of wireless handheld devices.
Increasingly Competitive Mobile Market
Increasingly competitive mobile market
McAfee will likely give Intel access to more security specialists and the ability to hard-wire more security features into future chips, many designed for the wireless handheld market. This past summer, McAfee acquired mobile enterprise management player Trust Digital and mobile security specialist tenCube.
Perhaps a bigger question for Intel in the wireless handheld space is whether their Atom processor line will be adopted by enough partners to give them a sizable market share in either the smartphone or tablet market.
Nokia has announced plans to work with Intel on future processors, but hasn't yet made a commitment to adopt the Intel Atom processor in its phones. Apple isn't a prospect, as the company makes its own A4 chips that power the iPhone and iPad. Samsung may be out, as it has started making its own processors for the Galaxy line of smartphones.
RIM might be a prospect and, of course, Microsoft could be a partner for Intel (as it has been in the past for netbooks) for its new Windows Phone 7 platform as well as HP/Palm for its WebOS platform. NVIDIA is now building the Tegra chip for the wireless handheld market. Tegra is a license of the ARM core-much like what both Qualcomm and Texas Instruments have done, both licensing the ARM core to build lines of processors for smartphones.
At some point, you'd think that Intel would consider acquiring ARM or at least license ARM core architecture (much like Apple, Qualcomm, NVIDIA and TI have all done) so that software on ARM-based processors would enable easy migration from one wireless handheld platform to another.
Intel may be a more viable player in the emerging tablet market instead of the smartphone market since the smartphone market already has major incumbents such as Qualcomm (with their Snapdragon processor) and TI.
It's a very competitive and, at the same time, wide-open market. No clear leader has emerged. But, with Intel's acquisition of McAfee and likely other strategic initiatives, "Intel Inside" may very well be an accurate statement for many hundreds of millions of wireless handheld devices in the not too distant future. Stay tuned.
J. Gerry Purdy, Ph.D. is Principal Analyst of Mobile & Wireless at MobileTrax LLC. As a nationally recognized industry authority, Dr. Purdy focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Dr. Purdy is an "edge of network" analyst looking at devices, applications and services, as well as wireless connectivity to those devices. Dr. Purdy provides critical insights regarding mobile and wireless devices, wireless data communications and connection to the infrastructure that powers the data in the wireless handheld. He is author of the column Inside Mobile & Wireless that provides industry insights and is read by over 100,000 people a month.
Dr. Purdy continues to be affiliated with the venture capital industry as well. He currently is Managing Director at Yosemite Ventures. And he spent five years as a Venture Advisor for Diamondhead Ventures in Menlo Park where he identified, attracted and recommended investments in emerging companies in mobile and wireless. He has had a prior affiliation with East Peak Advisors and, subsequently, following their acquisition, with FBR Capital Markets. For more than 16 years, Dr. Purdy has been consulting, speaking, researching, networking, writing and developing state-of-the-art concepts that challenge people's mind-sets, as well as developing new ways of thinking and forecasting in the mobile computing and wireless data arenas. Often quoted, Dr. Purdy's ideas and opinions are followed closely by thought leaders in the mobile and wireless industry. He is author of three books as well.
Dr. Purdy currently is a member of the Program Advisory Board of the Consumer Electronics Association (CEA) which produces CES, one of the largest trade shows in the world. He is a frequent moderator at CTIA conferences and GSM Mobile World Congress. He also is a member of the Board of the Atlanta Wireless Technology Forum. Dr. Purdy has a B.S. degree in Engineering Physics from University of Tennessee, a M.S. degree in Computer Science from UCLA, and a Ph.D. in Computer Science and Exercise Physiology from Stanford University. He can be reached at email@example.com.
Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I'll disclose it at that time. Through my prior affiliation with Diamondhead Ventures, I have an indirect equity interest in UPEK.