Intel has purchased part of the large wireless chip maker Infineon Technologies AG, buying the company behind the chips used in the Apple iPhone.
The company has fallen far behind in the growing smartphone processor market since their technology uses too much power, draining the phone battery too quickly.
With the acquisition today, for $1.4 billion in cash, Intel now has the wireless-chip division of the company, and an instant “in” to the market.
Intel purchased the mobile software company Wind River Systems last year for $885 million, and they have since been creating the mobile OS dubbed “Moblin,” which will run on smartphones using Intel chips.
Additionally, the company recently paid $7.68 billion for the large security software firm McAfee, and the company plans to integrate security into its mobile chips.
Result for: market
EMI Music has just purchased Digital Stores Limited, a company which provides online stores for artists including The Beatles, Queen & Oasis.
The acquisition is a logical one for EMI, which is in need of revenue streams outside of physical and online music sales. Although the business has been improving since the 2007 purchase by private equity firm Terra Firma, they still lost more than 600 million euros last year.
It also dovetails nicely with the recent trend of labels signing artists to 360 deals. These deals give the label a cut of everything from merchandise to tour revenue, and are becoming an increasingly important part of the modern music business.
Owning a company like Digital Stores also has a lot of potential for selling services to artists not otherwise affilliated with EMI. Both artists on other major labels and those who wouldn’t be signing with any major become potential revenue sources.
If they manage it well, this could be a key part of EMI’s transformation from a traditional label to an all around music marketing and artist services company. Of course any of the major labels could have done that already.
The stumbling block has never been capability. What they’ve lacked has been the will to change. As long as executives are fixated on preserving a dead business model that will remain a problem.
This purchase seems like a good move, but the follow through will determine just how successful it is.
Result for: market
Barnes & Noble has said this week, somewhat surprisingly, that it plans to put itself up for sale after suffering large losses in the battle for leader in the digital books market.
After the news, shares of the company jumped as high as 27 percent, finishing the day up 19 percent.
Founder and largest shareholder Leonard Riggio said he would consider being part of an investment group that could purchase the company.
The news appears to signal that the company is in desperate need of strong decisions that may not be so easy as a public company.
Says Forrester analyst James McQuivey: “They might feel they want to buy the company back now and take it public later and reap the windfall. But there aren’t a lot of investors who will be that certain about the probable outcome of that bet.”
The company has now formed a “special committee of four independent directors to consider all options for increasing shareholder value.”
While the company remains the top brick-and-mortar book store in the world, it has faced increasing pressure from Amazon and Wal-Mart.
