With Wind River, Can Intel Grab Some Apple Mojo?

Posted by: Cliff Edwards on June 4, 2009

Just how serious is Intel about breaking into new markets?

The chipmaker made that abundantly clear today, announcing it will acquire Wind River Systems, a maker of software for embedded devices, for $11.50 a share in cash, or about $884 million. The deal marks a 44% premium to Wind River’s June 3 closing price.

With the purchase, is Intel picking up some cues with its partnership with Apple? No doubt, the chipmaker is known best for its manufacturing prowess. But it has always had a big group of software engineers who work on ways to optimize Intel’s chips for everyday uses.

Intel, for instance, teamed up with Real to develop streaming media software that’s widely used today to transmit audio and video over the Web.

But the Wind River purchase points to an increased emphasis on selling or using that software with finished devices. The company earlier this year announced a new collaboration with contract manufacturer TSMC to create customized chips.

Coupled with its focus on developing the Linux-based Moblin operating system for handheld devices such as netbooks, the chipmaker is making clear that the Apple-like strategy of pairing hardware and software is the way to go.

Wind River helps companies develop and manage device software for embedded systems and wireless products.

Intel is betting that its Atom chip family will drive new growth. The company hopes to notch billion more in profits over the next few years, and it making these big moves to make it happen.

Reader Comments

Ancord

June 5, 2009 11:21 AM

I believe that Intel paying too much for Wind River.

Penguinista

June 5, 2009 1:59 PM

I believe that Intel underpays Wind River. I believe Intel got a bargain price for Wind River because Wind River is the key to opening the door to the embedded market for Intel.

buyandmonitor.com

June 5, 2009 2:39 PM

Intel like Microsoft has not moved the needle past its core.

Part of the problem is the boom/bust cycle where it starts all these projects when things are good and then kills them when cash is tight.

Hands off, i.e. in VC Intel used to be good till 2000, but who knows what it is now ..

Anyway Intel is no CSCO or ORCL that are known as for shrewd acquisitions. Knowing the shrewder owners of WindRiver (original founders are like Private Equity, bought back big share in at bottom now selling at high?)

As usual it might be another case of smart entrepreneurs screwing idiot bureaucrats (TWX & AOL)! As an Intel shareholder lets hope not.

Mark Sigal

June 5, 2009 3:46 PM

I sold a company to Wind River (device management vendor, Rapid Logic) and have partnered with Intel on/off for 13+ years so I have a pretty well formed perspective on the deal, which I blogged about in:

Closing the Book on Embedded: Intel buys Wind River
http://bit.ly/2I9ks

Check it out if interested.

Mark

Casylius

June 5, 2009 6:59 PM

With a load of free embedded OSes (Linux, Symbian, Androil, etc.) for applications, what Wind River can provide may not be that critical to Atom's embedded applications. With that amount of cash, where is the beef?

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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