QUALCOMM to Acquire Airgo and Bluetooth Assets of RFMD
Move Enables Customers to More Quickly Deliver Industry-Leading Mobile Broadband Devices — QUALCOMM Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies and data solutions …
Context & Ripple Effects
QUALCOMM announced on December 4, 2006 that it is buying Airgo Networks outright and taking over the Bluetooth assets of RF Micro Devices — a two-part connectivity purchase rather than a single target. The stated logic is speed: folding Airgo's MIMO-based Wi-Fi and RFMD's Bluetooth directly into QUALCOMM's chipset line so device makers can ship mobile broadband handsets faster instead of sourcing those radios separately.
First-order effects
- Airgo's MIMO Wi-Fi technology and RFMD's Bluetooth portfolio are absorbed into QUALCOMM's CDMA Technologies chipset roadmap, letting its handset customers integrate cellular, Wi-Fi and Bluetooth from one supplier.
- RF Micro Devices exits the Bluetooth business by selling the asset line, converting an internal product group into cash while QUALCOMM gains the design team behind it.
Second-order effects
- Handset makers buying QUALCOMM chipsets have less reason to pair them with standalone Bluetooth and Wi-Fi parts, squeezing vendors whose business depends on selling those discrete chips.
- Competing baseband suppliers now face a bundled-connectivity benchmark set by QUALCOMM's integrated approach, forcing them to buy or build equivalent MIMO and Bluetooth capability rather than compete radio-by-radio.
Third-order effects
- If the pattern holds, mobile broadband silicon consolidates around full-featured single-vendor platforms where the modem supplier also owns the short-range radios — shifting bargaining power from component specialists to whoever controls the integrated chipset.
The trend: Wireless chip vendors are expanding by acquisition, absorbing specialist connectivity makers like Airgo and RFMD's Bluetooth unit to bundle every radio onto their own platforms.