Intel Snaps Up Lantiq for Smart Home Market

Intel (INTC) has gobbled up Lantiq, a German Internet of Things (IoT) network chip maker and a former Infineon (IFX) business unit acquired in 2009 by private equity firm Golden Gate Capital for some $280 million.

Terms of the transaction were not disclosed. Intel said the deal is expected to close within three months pending regulatory approval. At this point, there’s no offical word whether Intel will fold the Lantiq operation into its Internet of Things unit or if it will operate independently. Intel also is silent on the disposition of its executive management team and 1,000 employees. The initial clues, however, signal the two companies will combine IoT teams.

Intel believes that the Munich-based Lantiq, a specialist in broadband access and home networking technologies, will expand its reach in the cable residential gateway market and widen its offerings for DSL, Fiber, LTE, retail and IoT smart routers. In other words, Intel wants a foundational foothold in the smart home market.

“By 2018, we expect more than 800 million broadband connected households worldwide,” said Kirk Skaugen, Intel Client Computing Group senior vice president and general manager.

He said Intel will add Lantiq’s technologies to its existing IoT solutions, security products and client devices.

“Intel has been a global leader in driving broadband into the home and to connected compute devices,” Skaugen said. “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.”

Dan Artusi, Lantiq chief executive, said the two companies’ “common vision about the evolution of the connected home and the intelligent network” will help to connect an “increasingly diverse roster of devices and services in the home.”

In Q4 2014, Intel’s year-old Internet of Things Solutions group generated some $591 million in revenue from IoT-related activities, up 10 percent from the prior year. And, for the full year the chip maker’s nascent unit generated $2.1 billion in sales, a 19 percent increase from last year.

Last December, Intel kicked off a full assault on the IoT with a new reference model to standardize connectivity and security and new hardware and software products. The chip maker figures the new offerings will pave the way for solution providers to expand the IoT’s reach from niche deployments to what it’s calling a “repeatable foundation of building blocks” to remove barriers to the emerging segment’s growth.

Intel has lined up a number of system integrators to advance the cause, setting up IoT-centric solution provider relationships with Accenture, Booz Allen Hamilton, Capgemini, Dell, HCL, NTT Data, SAP, Tata Consultancy and WiPro to co-develop solutions using the platform.