As reported, Intel finally owned up to one of the most colossal failures in the industry's history. On the other hand, there is a silver lining for the chip giant.
"We do believe the divestiture is a positive for Intel in that it proves the company is focusing on restructuring and growing its core [microprocessor] business," said analyst Doug Freedman of American Technology Research Inc.
"It is reducing headcount in a constructive manner. We are concerned that this was indeed Intel's most marketable business though, and that it may be difficult to divest other segments of the business," Freedman said. "The network processors business was not part of the sale. The next target for divestiture will be at the forefront of investors' minds."
With the acquisition of Intel's XScale line, Marvell appears to become a viable player in the handheld chip market.
"We believe that XScale is indeed beginning to gain traction in the marketplace," Freedman said. "Through discussions with Research in Motion, we have come to the conclusion that XScale is one of the most powerful solutions on the market today, with an impressive road map ahead."
Marvell's move creates a new competitor in the handheld chip arena, including wireless, points out Satya Chillara, analyst of American Technology Research.
Texas Instruments Inc. and Qualcomm Inc. are the dominate players, but Marvell is now moving alongside Broadcom Corp. and Freescale Semiconductor Inc., he said.
"We view [Marvell's] development as slightly negative for Broadcom in terms of competition intensifying in the wireless space," Chillara said in a report.
"Based on our analysis, Broadcom has been putting a huge emphasis on UMTS and HSDPA chip solutions," he said. "Marvell acquired a wireless business that claims to have 3G solutions. Despite these claims, we believe Broadcom is still leading Marvell by a good 12 months or more."
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