Intel Targets 'Smart Home' With Lantiq Acquisition

Intel is buying itself a position in the fixed broadband CPE and smart home networking chip market with the acquisition of privately held German system-on-chip (SoC) specialist Lantiq for an undisclosed sum.

Lantiq Semiconductor sells a range of SoC products for customer premises equipment (CPE) and broadband access network equipment (central office, cabinets, distribution points) to equipment vendors that cover the full range of fixed (and many wireless) technologies, including DSL (ADSL, VDSL, vectoring, G.fast), FTTx (GPON), WiFi and even LTE (for CPE products). It employs about 800 people and its annual revenues are believed to be around $400 million, though the company declined to comment on its financials.

Intel Corp. (Nasdaq: INTC) says the move will extend its existing cable home gateway business into the "telecom residential gateway and access network markets," and enable it to develop Internet of Things (IoT) smart routers. (See Intel to Acquire Lantiq.)

"By 2018, we expect more than 800 million broadband connected households worldwide," said Kirk Skaugen, senior VP and general manager of Intel's Client Computing Group, in the company's official announcement. "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."

Lantiq, which competes with the likes of Broadcom Corp. (Nasdaq: BRCM) and Ikanos Communications Inc. (Nasdaq: IKAN), has been one of the leading players in the development of fixed access network components in recent years and has been aggressively targeting the increasingly important market for vectoring and G.fast chipsets that can boost the broadband speeds of copper lines running into homes and businesses. (See G.fast G.ets G.reen Light, G.fast Is Here: Lantiq & Sckipio CEOs In Conversation, Lantiq Intros G.fast Residential Gateway Reference Design, Lantiq, Keymile Tout Major Vectoring Deployment, Lantiq Pushes 200M VDSL and Lantiq Intros New GPON SoC Solution.)

It has also found success at Deutsche Telekom AG (NYSE: DT) with its hybrid fixed/mobile "DSLTE" home gateway solution that combines VDSL and LTE connectivity.

The integration of Lantiq into Intel's Client Computing Group will create an even more formidable smart home networking rival for Broadcom as components vendors battle to develop the connected devices that will manage all manner of home networking connectivity and applications and offer a secure link to the Internet.

The rollout of gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.

The company name Lantiq is relatively new but the company has a rich history: It was formed in 2009 when Infineon sold its wireline communications unit to Golden Gate Capital for €250 million ($283 million). (See Infineon Sells Fixed Biz.)

Lantiq's other main backer is T-Venture , the investment arm of Deutsche Telekom. (See Deutsche Telekom Invests in DSL Chipmaker.)

The new deal isn't Intel's only link to Infineon's legacy, as it acquired Infineon's wireless chip business for $1.4 billion in 2010. (See Intel Looks to Infineon for the Full SOC.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

[email protected] 2/5/2015 | 12:43:03 PM
Re: Hold on to your britches.... Great questions of course, seven.... tks! 

So maybe they are buying some smart folks that will help them be great in comms.... :-)
[email protected] 2/5/2015 | 12:41:53 PM
Re: Hold on to your britches.... Great questions of course.... tks! 

So maybe they are buying some smart folks that will help them be great in comms.... :-)
Coreyanderson11 2/2/2015 | 8:25:57 PM
Re: Hold on to your britches.... Great insight, Ray and all others posting above. This article was the 2nd time in a week I had read about G.fast so interesting to hear there's already an acquisition! I do like the idea of companies acquiring assets, even if for the purpose of increasing valuations (hello, DishTV and $10B of licensed AWS-3 spectrum). While the chipsets are cool and of great value, I still see them as multiple pieces of hardware with a shelf life that will require their replacement. I'd never question the value of semiconductors (one of 2 brothers is at AMD) but I think it's safe to say that the IoT will rely heavily on solutions with hardware capable of quick software upgrades to increase hardware life cycles and reduce "rip and replace". CPE and network equipment with these capabilities continues to be at the forefront of my personal imagination, I hope others agree!
brooks7 2/2/2015 | 7:37:45 PM
Re: Hold on to your britches.... Ray,

Okay for those about to deploy G.Fast ask them 2 questions:

1 - How are you powering these small DSLAMs (since they now have to be 100m from the CPE to get the max speed)?

2 - How are you delivering POTS (None, Bypass and Served from CO, VoIP off of Modem, Port on DSLAM)?

As to Intel, they have a history in the comm world.  A really, really bad history.  Embedded processors nuked.  Basis nuked.  Level 1 nuked.  Don't get too excited about yet another entry into the comm space.


[email protected] 2/2/2015 | 5:14:36 PM
Re: Hold on to your britches.... Hi Seven

I said this changes everything -- in terms of the dynamics of the fixed broadband technology and smart home networking supply sector and the competitive dynamics. That's very different from the FTTH market.

I believe that the fixed broadband access market has had a new lease of life for about the past year in terms of the number of potential options, and the affordability of those options, and with BT (to be followed by others, I believe) committing to G.fast investments in extending the useful life of its copper tails, that's going to give it more impetus.

Is every carrier cutting wireline access budgets? I don't think so. Are they becoming more clever with their wireline broadband budgets? I think so. Will regulatory pressure impact individual capex bargaining positions and decisions? Of course and it always will and has done in TEF's case.

The competition, esp in Europe, is REALLY heating up with cable getting more aggressive with DOCSIS upgrades and companies such as Vodafone investing in those cable companies. That is what is helping to make this sector more interesting again and the telcos don't nioly have FTTH/B as the only competive response any more.

Yes, there will be fiber deployments in Gigabit pockets, which is exciting. The mass market, though, will lead up to that, as you note, and the pace of the transition from legacy DSL to networking options such as vectored VDSL and soon G.fast is making things a lot more dynamic and interesting.

Lantiq has a product set that fits right into a sweet spot with a bunch of Tier 1s right now and ad INtel's scale, economies of scale and ability to add even greater functionality to home gateways and other CPE and that makes for, in my view, a game-changing move in a market that has a new fire lit underneath it.
MordyK 2/2/2015 | 3:34:02 PM
Re: Hold on to your britches.... WHile I agree with you guys that the underlying unfied component layer can be the equivelant of the smartphone for the home, I don't think that it'll make much of a dent in terms of developer adoption unless its run by a third-party platform like iOS or Android. The reasononing for this pessimistic belief is that telco's simply make it so difficult to work on "their" equipment that developers give up and ignore it as if it didnt exist.

The only way I see carrier infrastructure taking hold is of the telco industry creates a third-party "clearing house" developer platform like Android that is unified and easy to use.

Theoretically Intel's acquisition of Mashery could be the unifiying glue, although I'm not sure that Intel has the cultural DNA to really help something like this flourish.
brooks7 2/2/2015 | 11:52:38 AM
Re: Hold on to your britches.... Okay guys,  What the what?

Intel jumps in and NOW wireline access is a big deal?  Isn't every carrier around the world CUTTING wireline access capex budgets?

In the thread about Europe didn't you guys just say that based on regulatory changes that Telefonica is thinking about dropping their FTTH budget?  In a thread from last week you talked about BT "milking the copper tail".

To date, I stand by my statement that this market is driven by either Competitive Pressure (NTT and Verizon as examples) or Government Intervention (KT and Telstra as examples).  In the long term (say 50 years), we will have a fiber only network.  But the road to get there is going to be bumpy.

jasonmeyers 2/2/2015 | 8:56:48 AM
Re: Hold on to your britches.... Agreed -- the confluence of gigabit networking connectivity to homes and smart-home applications of the IoT is going to make the residential market an interesting and exciting battlefield in the very near future. 
[email protected] 2/2/2015 | 8:18:48 AM
Hold on to your britches.... OK, so this just changed everything in terms of last mile fixed broadband tech and smart home developments.

This adds VDSL/vectoring/G.fast/GPON and integrated WiFi to cable gatway, security and NFV developments to create what COULD become the go-to components house for the future smart home and link to the public Internet.

Looking forwadr to what Broadcom has to say... 
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