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Qualcomm Buys Wireless Chip Makers

UPDATED: Qualcomm's acquisition today of two wireless chip makers is a signal that its rivalry with silicon giant Intel is getting personal.

Qualcomm said it will integrate RF Micro Devices' Bluetooth assets and Airgo's 802.11a/b/g and 11n technology into its Mobile Station Modem (MSM) chipsets. The wireless technology will also become part of Qualcomm's Snapdragon platform for mobile broadband connectivity, according to a statement.

Although few financial details of the acquisition of privately held Airgo Networks and RF Micro Devices were disclosed, the value to Qualcomm is evident.

In a statement, Sanjay Jha, president of Qualcomm's CDMA Technologies unit, said the acquisitions will give the chip maker's partners "comprehensive chipsets with seamlessly integrated features."

The acquisitions also illustrates the growing importance of personal area networking, a realization that came late to Qualcomm.

Focused for too long on wide-area networking, Qualcomm let Bluetooth and Wi-Fi go, Chris Ambrosio, director of wireless research at Strategy Analytics, said.

The acquisitions close that gap for Qualcomm and cut the lead Intel may have from Freescale and other wireless ventures, he said.

"This brings them up a notch," Ambrosio said. Without today's purchases, Qualcomm "would have been relegated to the edges" of wireless networking."

Both technologies are used to transfer multimedia, an area specially suited to RF Micro. RF Micro's Bluetooth Enhanced Data Rate (EDR) technology, used in mobile handsets and headsets, will become part of Qualcomm's MSM design.

"Qualcomm now effectively owns a stake in the Bluetooth market that will enable it to expand in the CE (consumer electronics) environment with greater ease, due to the growing profile of Bluetooth in the gaming, PMP and music player markets," ABI Research analyst Stuart Carlow, said in a statement.

On the Wi-Fi side, Airgo has played an active role in the much-anticipated 802.11n wireless standard, providing greater distance and speed, as well as less interference for local wireless networks. Qualcomm announced yesterday the first chipset from Airgo, which supports Draft 2.0 of 802.11n.

Although Airgo's addition will help Qualcomm gain more Wi-Fi market share among cellular modem vendors buying Wi-Fi or 3G chipsets, "the powerful Intel Centrino brand will be a significant obstacle to Qualcomm's success in that sector," ABI Research senior analyst Philip Solis said in a statement.

The acquisitions are expected to close by the end of 2006, according to a statement.