Partners: Intel Acquisition Of Altera Would Further Drive It Into IoT

If it's true that Intel Corp. is in talks to buy Altera Corp. -- as the Wall Street Journal reported Friday -- partners say the move could significantly boost Intel's Internet of Things lineup.

Intel stocks climbed 6.4 percent, to $32, after reports that it would buy San Jose, Calif.-based Altera, which could weigh in as Intel's largest purchase, with a market capitalization of $10.4 billion, according to the Wall Street Journal.

Partners say the reported acquisition would represent another step for Santa Clara, Calif.-based Intel to push into the IoT market, as Altera is best-known for making processors and solutions across the mobile network and automotive verticals.

[Related: Intel Intensifies Internet Of Things Drive With Lantiq Acquisition]

Todd Swank, senior director of product marketing at Equus Computer Systems, a Minnetonka, Minn.-based system builder, said buying Altera would be a great move for Intel, particularly as the vendor looks to take more steps to capitalize on the rising Internet of Things opportunity.

Swank said that while Intel continues to be a leader on the client side of the PC business, the excitement for channel partners is around the Internet of Things. This will allow them to play both sides of the field, he said.

"Intel continues to be a leader in that space and this is a really interesting move for them. ... I think Intel is smart, they know where the marketplace is going, they know where technology is going," Swank said.
"They're a leader in the space right now, but I think an acquisition like this is going to help them leapfrog where they are today. Bringing the two organizations together is just going to be a win-win for Intel's partners and customers to be prepared for the new devices coming."

Intel, a longtime giant in the server and PC chip space, has reinvented itself by powering forward in the Internet of Things market.

Internet of Things contributed $2.1 billion in sales for Intel in 2014, up 19 percent from its $1.8 billion in 2013.

In the fall, the company launched its Edison platform, which includes a computer using a 22nm chip with Bluetooth designed for the Internet of Things, and also stepped up its connected devices platform by signing an agreement to purchase Munich, Germany-based smart home broadband chip maker Lantiq in February.

Jack Narcotta, devices analyst at Technology Business Research, said Altera's manufacturing levels of user-customizable field-programmable gate arrays, or FPGA -- integrated circuits designed to be configured by a designer after manufacturing -- could suit Intel's longterm IoT strategy.

"FPGAs have made their mark as being really good for specific applications. ... You have a much smaller run of chips that are doing very specific work typically deployed out in the field," said Narcotta. "That’s a space where Intel could certainly benefit from, because I think of it as eventually becoming a really big influencer of the Internet of Things."

The two companies have previously worked together, as Altera announced in 2013 it would begin to use Intel's technology in its chip design.

Terms and timing of the potential deal could not be learned, said the Wall Street Journal.

Sarah Kuranda contributed to this report.