Intel Takes Small Step Toward IBM Model

Later that year, Wind River joined the Open Handset Alliance and in October 2008 announced that it would offer a commercial software product based on Google's (GOOG) open source mobile software Android.

Doug Freedman, an analyst at Broadpoint AmTech, said he's not sure how accretive the Wind River deal is for Intel, but said it "makes sense from the standpoint that Intel is trying to service and grow an embedded processing market."

"They presently participate in it, but it's become more of a focus for the company to support," Freedman said, adding that the embedded processor market is also serviced by IBM, Freescale Semiconductor and STMicroelectronics (STM), among others.

FBR's Berger said the purchase price and additional headcount won't impact Intel's overall financial position and margins a great deal, but there are several strategic implications for the chipmaker.

"We think Intel will increasingly pursue added software exposure as a way to embed more value and IP into its chips, and to make its embedded customer engagements more 'sticky,'" Berger said in a research note. "Additionally, some concerns are mounting internally about the continued duration and pace of process technology advancements."

In March, Wind River said fiscal 2009 revenue rose 9.5% year-over-year to $359.8 million, while full-year net income of $10.7 million reversed a year-ago loss of $2.3 million. For fiscal 2010, the company said revenue is expected to be in the range of $360 million to $380 million.

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