Converging on their prey
US mobile chip giant Qualcomm has made its most aggressive move yet towards the convergence of the various technology industries, with the proposed acquisition of wireless networking company Atheros for $3.1 billion.
The reason this is a convergence play is that Atheros is strongest in making chips and technology for wireless networking, including 802.11 solutions, mobile WLAN, Ethernet, GPS, Bluetooth and powerline networking. We hadn't come across Atheros before, but it seems to operate in a similar area to Broadcom.
Qualcomm, of course, is already the market leader in the chips and technology that enable mobile phone communication, such as 3G. Now it can also provide pretty much all the other types of wireless communication any mobile device might require.
"It is Qualcomm's strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices," said Paul Jacobs, chairman and CEO of Qualcomm.
"The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels."
This deal was leaked yesterday by the NYT. Shares in Atheros has been trading at around $37 prior to the NYT story, which said Qualcomm was offering $45 per share. They subsequently jumped to $44 per share and Qualcomm has now confirmed it is offering $45.
