Intel CEO mum on RIM Tech Exchange Rumor

Comments

Intel Corp.’s chief executive, Paul Otellini, declined to comment on Tuesday about speculation that his company would exchange technology with BlackBerry maker Research In Motion Ltd. “I haven’t heard that speculation so I can’t address it,” he told reporters at a conference for technology developers in San Francisco.


A report from CNBC television on Monday said Research In Motion had agreed to a deal to use battery-saving chip technology from Intel. In return, Research In Motion would support Intel’s push to encourage WiMAX, a long distance wireless technology.

Later, an Intel spokeswoman said the company was not going to make an announcement concerning RIM at the conference this week. “We are not making such an announcement,” said Amy Hamilton.

Analysts were divided on whether there was any truth to the rumor and whether it would benefit either company.

“As far as we can tell, the rumor is false, and there was no fundamental reason for RIM’s shares to rise yesterday,” wrote ThinkEquity analyst Pablo Perez-Fernandez, warning investors not to trade on rumors.

RIM shares jumped C$4.50, or 5.1 percent, to C$93.09 on the Toronto Stock Exchange on Monday, but gave up some of those gains on Tuesday, sliding 96 Canadian cents, or 1 percent, to C$92.13 by midafternoon. On Nasdaq, the stock was off 59 cents at $76.90 and Intel was down 26 cents at $25.80.

Perez-Fernandez added that a deal to license Research In Motion’s technology “as it pertains to efficient battery use would be irrelevant in the face of the myriad issues” facing the company.

Rob Sanderson, an analyst with American Technology Research agreed saying, “I would be very skeptical whether RIM is jumping on board with WiMAX.”

“There’s a very high likelihood that they would work with Intel on Wi-Fi,” Sanderson said.

“RIM has been very public and open in their support for Wi-Fi and initiatives in the Wi-Fi arena and they are going to need chip suppliers. For Intel, RIM would be a customer but a very small customer at this point.”

Wi-Fi is a popular technology for wireless communications over short-distances and is designed for use inside offices, cafes and homes. WiMAX is an emerging wireless technology for communications between buildings and around cities.

However, Canaccord Capital’s Peter Misek speculated that an Intel-RIM announcement was imminent, given the third-party corroboration of the brokerage’s original view.

“If true, the impact of this partnership could be extremely positive for RIM,” Misek wrote in a research note.