Intel Corporation has agreed to buy embedded software company Wind River for $884 million (£550 million); its first acquisition in four years.

The company specialises in device software optimisation (DSO) - providing software to help all kinds of phones, gadgets and CE devices work faster and smoother.

Wind River technology is currently deployed in over 300 million devices worldwide, including products by Apple, Hewlett-Packard, Motorola and even NASA.

Future in phones

The move by Intel is part of its strategy to grow its processor and software presence outside the traditional PC and server markets into embedded systems and mobile handheld devices.

Intel expects smart phones, mobile Internet devices, in-car info-tainment systems to become increasingly connected and intelligent, requiring supporting applications and services as well as full Internet functionality.

Intel hardware can be already found in around 80 per cent of the world's computers, and yesterday the chip-maker demonstrated the first working mobile internet devices (MIDs) using its new low-power Atom chipset, codenamed Moorestown.

The devices were all running version 2.0 of Intel's Linux operating system called Moblin, and are expected to hit the market early next year, according to PC World.