Qualcomm to Buy Atheros for $3.1 Billion

Qualcomm Inc. agreed to buy Wi-Fi chip maker Atheros Communications Inc. for $3.1 billion in cash as it aims to address growing demand for devices that use Wi-Fi to connect to the Internet.The deal—Qualcomm's largest acquisition to date—fills a hole in the company's communication-chip offerings. The importance of Wi-Fi has been growing as more devices—including smartphones, tablets and notebooks—connect to the Internet.

The deal, which values Atheros at $45 a share, comes during a flurry of acquisitions in the technology sector and puts pressure on Qualcomm's rivals, such as Broadcom Corp. Chip companies, including Intel Corp., have been using their high levels of cash to make purchases to add more features to their chips. Qualcomm has about $10 billion in short-term cash and marketable securities. Adding long-term marketable securities raises the figure to $18.4 billion, with $12.1 billion of that located offshore, the company said.

A takeover of Atheros gives Qualcomm greater exposure to Wi-Fi chips and other markets where it doesn't have a significant presence, including providing components for laptop personal computers, which now come standard with Wi-Fi chips.

The deal is expected to close in the first half of 2011 and modestly add to Qualcomm earnings in fiscal 2012. Atheros will be renamed Qualcomm Networking & Connectivity, and Atheros President and CEO Craig Barratt will join the company as president of the group. Mr. Jacobs said Qualcomm also plans to retain the rest of the Atheros senior management team.

For the complete article, please click here.

Wi-Fi Alliance joins forces with HomePlug Powerline

The Wi-Fi Alliance and the HomePlug Powerline Alliance announced a recent agreement to collaborate on applications that allow smart energy grids to interoperate with "connected" homes.

The two alliances are part of the Smart Grid Interoperability Panel, a forum that coordinates smart grid standards. They plan to collaborate on wireless and wired network applications for what the forum calls its Smart Energy 2 Applications Profile.

To read more about this collaboration, click here.

Pricing Still an Issue for 3G Femtocells

In a recent interview with Light Reading Ericsson's Vice President of Radio products said that femtocells were beaten by WiFi as the technology of choice for data services within the home. Pricing seems to be the key factor inhibiting wide spread adoption of 3G femtocells.

In 2008, the goal of major chip set providers and femtocell systems providers was to break the $100 barrier. Chip sets were still considered to be quite expensive to make femtocell attractive as a mass market product. In addition to pricing, another key factor that drives the cost of deploying a femtocell is the fact that they operate in a regulated and licensed frequency. As a result, femtocells come with some legal caveats in some markets. Operators are still faced with potential truck rolls to assist customers with setting up their femtocells. Wireless operations at most of the major operators are not set up to handle such onsite support with the same efficiency as their wireline counterparts (even though they are part of the same company).

Net effect is that femtos have to be combined with routers or gateways to really get some penetration. Operators will have to consider ‘HomeZone’ type of services offering heavily subsidized data services as long as consumers are feeding off a femtocell. In our recent study titled 'Broadband, Communications and Entertainment Bundles' we found that consumers are more interested in femtocells for their potential to offer unlimited data services than in their potential to enhance indoor coverage.

WiFi is a good interim solution, but it drains the battery rather rapidly. 3G radio by itself is quite demanding in terms of power requirements and WiFi exacerbates that situation. Femtocells certainly have a future. Femto adoption depends highly on what the price point is going to be and more importantly what sort 'subsidies' wireless operators will be able to offer on services riding femtocells and ensuing broadband connections.