Broadcom Buys Bluetooth Chip Maker - Page 2

ill create unique, world-class solutions for the rapidly growing wireless product arena," Colleran said.

"Broadcom's market presence and business infrastructure will accelerate Innovent's ability to bring our Blutonium line of wireless chips to a market that is eager to implement this technology in real products," Colleran added.

According to research by eTForecasts, only 2 percent of the Internet users in the U.S. currently access the Internet with a Web appliance. But in the next five years the availability of portable appliances will dramatically change the marketplace.

By the end of 2005, eTForecasts predicts that 55 percent of Internet users in the U.S. will access the Web through handheld devices, in addition to PC Internet access for home use.

The same report predicts that worldwide Web appliances will have an even stronger impact on wireless access to the Internet. At the end of this year it's estimated that 6 percent of Internet users will access the Web through a portable device and that the market segment will grow to over 71 percent by the end of 2005.

eTForecasts anticipates that Web-enabled phones will be a major factor in driving the rapid growth of the market.

Dr. Egil Juliussen, eTForecasts analyst and author of the reports said this market shaft does not mean that the PC is dead, merely that user's want to take the Net with them, wherever they go.

"This does not mean the end of PCs as Internet access devices, but an increasing share of Internet users will augment their online life with web appliances," Juliussen said. "PCs will remain the leading Internet access device, especially for heavy-duty usage. By 2005 most Internet users will be accessing the web from both PCs and information appliances such as web cellular phones and web appliances."

Innovent and Broadcom have a number of product demonstrations scheduled for the Bluetooth Congress 2000 in Monte Carlo this week, including full wireless Internet web browsing incorporating video and audio streaming across a Bluetooth link implemented with Innovent's CMOS RF transceiver.

As a part of the deal, Broadcom will issue an aggregate of approximately 3 million shares of its Class A Common Stock in exchange for all outstanding shares of Innovent Preferred and Common Stock after exercising outstanding employee stock options.

The transaction is expected to close within 60 days as the boards of directors of both companies have approved the merger. Currently the deal must be approved by Innovent shareholders and in compliance with regulatory requirements and other customary closing conditions.