RealTime IT News

Sierra Wireless Takes Qualcomm Unit

Canada-based Sierra Wireless Inc. and Qualcomm Inc. this week finalized a series of agreements, which includes Sierra Wireless' acquisition of Qualcomm's Code Division Multiple Access (CDMA) module business.

The price of the all cash transaction was not disclosed, but the primary deal calls for Sierra Wireless to purchase Qualcomm's module business' inventory, manufacturing and customer commitments. The deal does not include any employee or facility transfers.

Additionally, Sierra Wireless has signed a deal that extended its existing license agreement with Qualcomm through the third quarter of 2002. Sierra Wireless will also supply CDMA data modules that will be integrated into Qualcomm's new mobile communications system, a product that provides two-way mobile communications and tracking for the transportation industry.

Glen Brownlee, Sierra Wireless executive vice president and chief operating officer, said the addition of Qualcomm's CDMA solutions is essential to developing its data products business.

"The expansion of our CDMA license allows us greater flexibility in creating and growing our future product roadmaps as high speed networks emerge and as voice and data devices converge," Brownlee said. "Overall, the agreements further our relationship with Qualcomm in building the demand for high-speed CDMA data applications for emerging markets worldwide."

With the addition of the module products to its lineup, Sierra Wireless will be capable of accelerating its time-to-market delivery and will broaden its CDMA product line to include personal computer cards and modules.

Brownlee said primary benefit is firm's ability to immediately expand its wireless product portfolio.

"The deal expends our product line up today, and could add $10 to $12 million to Sierra's sales before the year is through."

Susan Rile-Strauss, Qualcomm Wireless Business Solutions vice president of manufacturing, said the firm looks forward to further consolidating its business around its core goods and services.

"Qualcomm Wireless Business Solutions is pleased to have entered into a strategic supply relationship with Sierra Wireless for supply of the CDMA modules, which are a necessary component of our OmniExpress product," Rile-Strauss said. "We look forward to working with Sierra Wireless to grow this business."

The Sierra Wireless deal marks the second large asset that QUALCOMM has shed this year. Qualcomm settled its long-standing legal squabbles with Ericsson in May, when the companies agreed to swap QUALCOMM's handset manufacturing division for the mobile phone firm's commitment to license its CDMA technology.