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Why Intel wants a piece of McAfee

A plant of the U.S. chip maker Intel Corp.

TEXT OF STORY

STEVE CHIOTAKIS: A big deal happening in computers. Chipmaker Intel says it'll buy anti-virus software maker McAfee in a cash transaction worth nearly $8 billion. Now, McAfee would become a wholly-owned subsidiary of Intel's software group. Chris Nuttall is technology correspondent with the Financial Times. He's with us live from London. Good day to you, sir.

CHRIS NUTTALL: Good day.

CHIOTAKIS: I'm curious, Chris, as to what Intel thinks an anti-virus software company can bring to Intel, to its chip-making company, a hardware company.

NUTTALL: Yeah, I was scratching my head to begin with on this. But the way Intel sees it is that security is the third pillar of the computing experience, they say. The other two pillars up to now have been Internet connectivity and energy efficiency. And they see the fact that billions of devices are going to come online over the next few years, and better devices -- like your fridge or your TV, mobile phones, obviously -- and they're all going to need security. So Intel wants to tie the the security software closer to its chips and have a security advantage over its competitors in the markets. And McAfee is its biggest ever acquisition. The previous biggest acquisition was a networking chip company more than 10 years ago for $2.2 billion. So it's pushing the bread out here to the tune of nearly $8 billion. But it thinks it's a really central strategy for the company as a whole.

CHIOTAKIS: As you mentioned, Chris, its been a while sine Intel has really ventured out like this. What does it say about the health of the computer market?

NUTTALL: Well this will help them not just in computers. They do have quite a good strategy in the enterprise for business computers, something called vPro and active administration it's called. And they can turn your computer off and they can search it remotely for viruses. But they see a huge market that they want to make in-roads in -- in smartphones, security's going to be a big issue there in the future. Also in TVs and all kinds of other devices, so they see huge markets there. As well as the computer market, which is growing as well, and this will help in all of those areas.

CHIOTAKIS: Just a few seconds left, Chris. Could there be any kinks in this deal with the past anti-trust accusations lobbed at Intel?

NUTTALL: They just reached a deal with the Federal Trade Commission this month -- alleged market dominance and how they were abusing that. Paul Otellini, chief executive, said today that they were looking at bundling McAfee software with Intel hardware, and they intended to continue to work with other security vendors. So I don't think... a problem there.

CHIOTAKIS: All right. Chris Nuttall from the Financial Times. Chris, thanks.

NUTTALL: Thank you.

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