Will Intel go Google on Apple?

Intel has just bought the mobile chip-maker Infineon, which has the technology industry abuzz.

Intel is the biggest maker of computer ‘brains’ on the planet, and its x86 architecture has been a successful model running Microsoft Windows on PCs, so far. However, it has become clear that the mobile devices are at the threshold of overtaking the desktop computers.

Intel has developed a low-power Atom processor, but it has not been quite popular in the face of processors that use the ARM based architecture. With the purchase of Infineon, Intel gets its foot in the door of the mobile processor world. Previously, Intel had partnered with Nokia to develop a mobile platform; at that time, this was a move by these companies to counter Qualcomm cornering “…the market on vague- sounding, ultra-mobile device niches…”

That project wasn’t too successful, but with the purchase of Infineon, Qualcomm, which makes ARM-based processors, beware: “Intel-Infineon deal goes far beyond handsets, putting new technologies in netbooks, tablets, embedded PCs, and more“; this could make Intel “Mobile’s next Goliath“.

In addition, it mounts a challenge to Apple’s lead of making its own A4 chip based on ARM. “…the Intel (INTC) acquisition of Infineon’s wireless unit has probably changed the balance. The move allows Intel to add an piece of the mobile puzzle that it never had before. Given its expertise in advanced semiconductor construction, the company could create a single package that would offer most of what handset manufacturers need to catch up to the iPhone, at least in terms of size and power, and still be compatible with the Android operating system.”

Given Intel’s expertise in putting “…more stuff onto chips and get more chips out of a piece of silicon…“, this acquisition will be synergistic in providing Intel to “…offer bundled packages and potentially make itself economically attractive to handset vendors.”

Paul Otellini, Intel’s CEO, told Liz Claman of Fox Business that about his deal, “Steve was very happy…and there were a number of competing companies for it…I think they’re very happy that Intel won the bid.”

Only time will tell if Steve Jobs remains happy about having someone providing aid and comfort to iPhone’s competitors. He has been burnt once by Eric Schmidt sitting on Apple’s Board and then coming out with an Android handset; he has to be carefully watching Intel’s moves, especially since Apple uses Infineon’s chips in the iPhone.

I would not be surprised if Apple ditches the ‘Intel-Infineon’ altogether. It could use AMD (it already uses ATI graphics, now a part of AMD) instead of Intel processors, and ramp up its in-house chip manufacture to avoid dependence on ones made by Infineon.