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Intel eyes connected homes with Lantiq purchase

The company has been working to diversify beyond its personal-computer chips business. Last year's focus was on wearables.

A part of Intel's booth at the Consumer Electronics Show last month. Sarah Tew/CNET

Intel is expanding its push into the connected-home market, agreeing to buy home-networking and broadband chips company Lantiq.

The Munich, Germany-based company could help Intel build up its smart-home technologies, especially in residential gateways and smart routers, which are used as hubs to connect other devices around the house.

The deal, announced Monday, is expected to close in the next three months, though terms weren't released. Lantiq was created in 2009 when German chipmaker Infineon agreed to sell its wireline communications business to San Francisco-based private-equity firm Golden Gate Capital for 250 million euros ($280 million).

The deal is a small sample of a big push by many tech firms to get a piece of the rapidly expanding smart-home market. Last year, Samsung Electronics snapped up smart-home devices maker SmartThings for an undisclosed sum, and Google purchased smart thermostat maker Nest for $3.2 billion. These companies are all betting that people's homes will soon include many more connected devices, so they are busy making Internet-connected appliances and more complex routers.

The acquisition comes as Intel, based in Santa Clara, Calif., has been working to grow past its core personal-computer market, which had faced decline for years, and into new areas around the Internet of Things, in which just about anything can be connected to the Web. Many of Intel's Internet of Things deals last year centered on wearable technology, with the company teaming up with watchmaker Fossil and glasses-frame maker Luxottica to create new devices.

Intel's Internet of Things segment has been seeing strong growth already, posting 19 percent higher revenue to $2.1 billion in 2014. That business includes products focused on smart home, transportation, retail and other areas.