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Intel buys iPhone 3G chip supplier, Infineon

Intel has confirmed weeks of rumor, filing a $1.4 billion takeover offer for iPhone component supplier, Infineon’s Wireless Solutions business.

Announced last night, the move means Intel’s determined to take a slice of the emerging smartphone business.

“The global demand for wireless solutions continues to grow at an extraordinary rate,” Intel CEO Paul Otellini said in a statement.

“The acquisition of Infineon’s WLS (Wireless Solutions) business strengthens the second pillar of our computing strategy–Internet connectivity–and enables us to offer a portfolio of products that covers the full range of wireless options from Wi-Fi and 3G to WiMax and LTE (4G).”

Infineon ranked fourth in cellular-baseband shipments last year with a 10.7 percent unit share. These are the chips which enable 3G on these devices. The company also supplies Nokia and Samsung.

WLS will operate as a standalone business. “Intel is committed to serving WLS’ existing customers, including support for ARM-based platform,” the company said.

Apple has a previous relationship with Intel, and currently depends on Infineon chips — open to question is whether Apple may invest in development of its own baseband technology as part of its effort to develop its own breed of ARM-based mobile processors.

The board of directors of Intel and the supervisory board and the management board of Infineon have approved the transaction. It is expected to close in the first quarter of 2011.

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