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Intel Wants Cellular Users to Hop on Net

In an effort to capitalize on the growing demand for wireless communications, Intel Corp. Thursday announced its acquisition of DSP Communications, a supplier of digital cellular communications tools, for $1.6 billion.

Under terms of the agreement, Intel (INTC) will acquire DSP (DSPC) for $36 a share in an all-cash deal. DSPC will become a wholly owned subsidiary of Intel reporting within Intel's Computing Enhancement Group.

DSPC provides features for wireless handsets including chipsets, reference design, software and other technologies. Specifically, it offers expertise in digital cellular technologies for personal digital cellular (PDC), time division multiple access (TDMA), code division multiple access (CDMA) and third-generation (3G) standards. Intel said it will use DSPC's wireless resources to offer Internet tools to companies.

"DSPC brings tremendous experience in cellular digital and voice technologies which, when combined with Intel's data and Internet expertise, will provide a more complete solution to the broad cellular market segment," said Craig Barrett, president and chief executive officer of Intel.

"Cellular technology is emerging as a new high-speed method of connecting to the Internet and we believe over time will become increasingly important for connecting PCs to the Internet."