LONDON Another analyst has come out with a positive note on the prospects for Infineon Technologies AG, this time regarding its wireless business unit.
According to Stuart Robinson , Director of the Handset Component Technologies service at Strategy Analytics (Milton Keynes, England), in a report on the German chip group's cellular baseband strategy, product portfolio, customer relationships, strengths and weaknesses, Infineon is differentiating itself from the crowded GSM chipset market by providing highly integrated and low-cost solutions.
"To date, however, the company currently lacks a complete product portfolio and has under-invested in multimedia, connectivity and application processor solutions," says Robinson.
Sravan Kundojjala, another analyst at the group, adds: "Infineon could be a good partner to companies looking for RF expertise and baseband customer relationships."
The report notes that Infineon has baseband and RF relationships with the top seven mobile handset vendors, a significant improvement over its position in 2005 when it had just one baseband customer. It adds that Infineon is positioning itself as a low-end baseband supplier to 2G, 2.5G and 3G markets while leveraging its RF transceivers and power management expertise.
However, the company continues to struggle due to its DRAM memory subsidiary, Qimonda, which could potentially jeopardize its long-term sustainability and make it vulnerable to takeover.
Earlier this week, James Crawshaw, an analyst at Standard & Poor's equity research in London, suggested Infineon may not have to resort to bankruptcy protection to clear the debts threatening the chip vendor's stability.
The German chip maker's decision to offer creditors a sweet premium on its outstanding long-term debt and recent improvements in its financial profile will buy Infineon enough time to complete reorganization and cost-reduction actions that could help it dodge bankruptcy, said Crawshaw.
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