Intel Closes Basis Acquisition
Intel Corporation (INTC) recently entered the health tracking wearbles market with the completion of the Basis Science acquisition. Intel’s share price touched an intraday high of $25.67 following the news before closing at $25.46, thereby recording a 1.4% increase.
The Basis team of 60 members will join Intel’s New Devices Group to work on the chipmaker’s future wearable products. Though the financial terms of the deal were not announced, Intel reportedly paid about $100 million. Intel will likely continue selling Basis’ products through the company’s present trade channels.
Basis is the inventor of one of the most effective and far-reaching fitness and health wearables to date. With the acquisition of Basis’ assets, Intel gains additional resources to target the hottest electronic device category- wearables.
Intel apparently doesn’t have plans to kill off the Basis brand. In fact it’s possible that Intel will build on the brand with additional products that could stimulate its growth in the wearables category.
Intel has been showing increasing interest in the space. Earlier this year, at the Consumer Electronics Show, Intel revealed its ambitions to explore deeper into wearables and perceptual computing. Intel presented a range of gadgets and wearable devices powered by the Quark processor. It also displayed smart earbuds to record heart rate patterns through the headphone jack and announced its plans to launch a GPS integrated smartwatch.
The latest move confirms the chipmaker’s intent to design a smartwatch. Intel can now gain traction in the smartwatch space with the acquired technology.
Basis Science, a privately held company, is financed by DCM, Mayfield Fund and Norwest Venture Partners. It has designed a smartwatch, claimed to be the world’s most advanced health tracker, and an online personal dashboard to help users lead a healthy lifestyle by including good habits in their everyday routine. It faces competition from the likes of Fitbit and Jawbone.
The wearables and Internet of Things (IoT) segments are emerging areas within technology where companies like Cisco (CSCO), Google (GOOG), Apple (AAPL) and Facebook (FB) among others are trying to build a position.
Currently, Intel holds a Zacks Rank #3 (Hold).
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