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Wednesday, September 01, 2010, 05:15 am PT (08:15 am ET)

Intel CEO says he asked Steve Jobs' opinion on Infineon deal

When Intel acquired the wireless unit of chipmaker Infineon, the company's CEO consulted Apple Chief Executive Steve Jobs, who was said to be "happy" with the deal.

Intel announced on Monday that it had agreed to buy the wireless division of Infineon for $1.4 billion. Infineon makes the baseband chip found in the iPhone, and has supplied chipsets for Apple's handsets since 2007.

On Monday, Paul Otellini spoke with Fox Business and was asked by Liz Claman how Apple feels about Intel's acquisition of Infineon. Otellini said he personally spoke with Jobs, and the Apple co-founder believed the deal was a smart move.

"Steve was very happy... The industry was abuzz that this business unit was on the market, and there were a number of competing companies for it," he said. "I think they're very happy that Intel won the bid."

He said having a presence in the iPhone, however, was not the "overwhelming factor" in the deal. He said the chips have a good revenue stream and Intel believes the wireless technology capabilities will strengthen Intel's portfolio.



While Otellini's comments were positive this week, in the past his company has ridiculed Apple for relying on the ARM architecture to power its mobile devices. The company, in the past, publicly slammed the iPhone, stating that the device is not capable of accessing the "full Internet," and asserting that such functionality requires Intel-based architecture.

In addition to giving Intel a presence in the iPhone, the Infineon deal will also place the company, through its newly acquired products, inside the 3G-capable iPad. Years ago it was rumored that the chipmaker's low-power Atom processor could eventually make its way into the iPad, though that never came to be.

Instead, Apple decided it would make its own moves in the chipmaking business, through key acquisitions of PA Semi for $278 million in 2008, and Intrinsity this year for $121 million. Those purchases set the stage for Apple to build the custom A4 processor, based on the ARM architecture, found in the iPad and iPhone 4.