It was somethingof a surprise when last month Infineon Technologies announced the sale of its wireline business unit, a profitable long-standing core activity for the former Siemens subsidiary. Sold to private equity investor Golden Gate Capital, the company will continue its DSL activities – and is not ruling out entering other market segments, designated CEO Christian Wolff (pictured right) told EE Times Europe in an interview.
Unlike other German high-tech companies acquired by Golden Gate Capital – such as Leica Microsystems (now Vistec) – the company will keep its headquarters in Neubiberg, a suburb of Munich.
Wolff, who oversaw Infineon’s wireline business for many years, will continue to lead the new company, which, earlier this month, was renamed Lantiq.
Some market watchers have identified a gap in the company’s product portfolio which could represent a significant strategic weakness in the competition against the likes of Qualcomm or Broadcom. The company currently does not serve the cable modems segment, which means that in some important geographies such as the U.S. it might miss major market opportunities.
No negative effects
Wolff rebuffed the idea that the focus on a few but strong and growing market segments would have negative effects. The company plans to maintain this focus on xDSL in several flavors, voice infrastructure for mobile operators, and on VoIP technologies, Wolff explained. "We serve all known xDSL-flavors – ADSL, VDSL and SHDSL – and all include VoIP support, a technology in which we are very strong."
Supplementing the wireline DSL technology, the company also will continue to develop and support devices for DECT cordless handsets. This includes the new CAT-iq standard, Wolff made clear. "This is all in line with our primary target to complete our xDSL portfolio, in particular at the CPE site" – while he believes that at the DSLAM side the company already has reached this goal.
The building blocks required are DSL, a powerful processing unit, VoIP, DECT and WiFi, the manager said. As an emerging business opportunity Wolff identified the G.hn home networking standard.
Wolff categorically did not rule out that newly named Lantiq would change its stance towards the cable modems opportunity. While for Infineon it would have been an inappropriately high effort to develop cable modems and the company currently had no intention to tackle this segment, he said the cable modem question "will have to be answered after the closing" of the sale to Golden Gate Capital.
This is expected during the next few months.
Wolff also denied that without cable modem technology the company would not have a chance to do business within the U.S. "We do very significant business with U.S. customers such as AT&T, Verizon, or Qwest," he said. "There is a huge installed [DSL] base in the US, and just the replacement market makes up a good business for us."
Among the emerging markets, India is of particular interest for this kind of business. The reason is that in India there is a strong trend to connect DSL infrastructures directly to TV sets without using a PC. Thus, a financial barrier for many end users will fall away – with the consequence that the market will grow faster than before. "The TV set takes over the task of providing internet access to the family," Wolff explained. "This does not only refer to IPTV but also to normal internet access."