Intel forms wireless group

SAN FRANCISCO -- Intel Corp., the world'sNo. 1 computer chip maker, said it formed a new business groupfocused on wireless communications, and gave its chieffinancial officer Andy Bryant additional duties.

SAN FRANCISCO -- Intel Corp., the world's No. 1 computer chip maker, said it formed a new business group focused on wireless communications, and gave its chief financial officer Andy Bryant additional duties.

The company said its Computing and Enhancement Group would become the Wireless Communications and Computing Group, to focus on cellular and wireless communications.

"We think it's a major play for us," said Craig Barrett, Intel's president and chief executive, in an interview. "It's potentially a large market."

The move is the company's latest as it expands beyond its core PC microprocessor business on higher growth areas such as communications and networking. In the past year, Intel has made a flurry of acquisitions as it seeks to become the building block supplier of the Internet economy.

In October, Intel (Nasdaq: INTC) announced a $1.6 billion deal to buy DSP Communications Inc., a supplier of chipsets, chip designs and software for digital cellular products. With its new structure, DSP will report as a wholly owned subsidiary within the Cellular Communications division of the new Wireless Communications and Computing Group.

Growing market
Mark Edelstone, an analyst at Morgan Stanely Dean Witter, said the market for chips for cellular phones and wireless devices is rapidly growing to almost 10 percent of the approximately $144 billion semiconductor industry,

"It's growing three times faster than the PC market," Edelstone said. "It makes a lot of sense. It just highlights the focus that companies are placing and should place on wireless."

The wireless communications area will also continue to be an area where Intel will look to make acquisitions, Barrett said.

"We have been continuously looking at candidates in the networking space and the communications space and also this area," Barrett said. "We are not ready to announce anybody right now."

Products shuffle
Intel's flash memory business will also become part of the new wireless group. Ron Smith, an Intel vice president, was previously the general manager of the Computing Enhancement Group and will become general manager of the Wireless Communications and Computing Group.

Intel's networking chip business, the Network Communications Group, will now include certain products and businesses that were under the former Computing and Enhancement Group. Embedded controllers and microprocessors for the communications industry will fall under the network group, which is headed by vice president and general manager Mark Christensen.

Bryant, an Intel senior vice president and the company's chief financial officer, will take the additional title of enterprise services officer. He will add to his current responsibilities the management of Intel's human resources, information technology and electronic-business functions, worldwide.

One of the goals is to help increase the volume of products Intel sells over the Internet and the volume of supplies it buys online. Currently, Intel is selling about $1 billion a month over the Internet.

With his new duties, Bryant will oversee the execution of Intel's e-business strategy with its customers and suppliers, worldwide delivery of employee services, human resources strategies and initiatives, and provide information technology and finance support to Intel worldwide.

Barrett said that by the end of 2000, Intel will be able to conduct 100 percent of its sales over the Internet. "I think it will take a bit longer for purchases because it's a bit easier for us to get our customers to buy over the Net."

Analysts said that Intel typically moves its executives around in many different roles and that Bryant was likely looking for some additional challenges.

"Any CFO of a company that has $10 billion in cash is probably going to be looking for other challenges," said Drew Peck, an SG Cowen & Co analyst. "It's not like he is sitting on the edge managing the treasury."