Broadcom buys wireless chip maker

Eyeing a line-up of components for wireless networking products that would span Bluetooth personal area networks, wireless LANs, mobile phones and handheld computers, network chip maker Broadcom Corp. has agreed to acquire cellular component vendor Mobilink Telecom Inc.

Privately held Mobilink, based in Santa Clara, Calif., makes chips and product designs for GSM (Global System for Mobile Communications) handsets and is completing certification of GPRS (General Packet Radio Service) high-speed wireless networking chips. Its products will complement Broadcom’s wireless offerings, which include chips for IEEE 802.11b wireless LAN and Bluetooth personal area network hardware, according to a Broadcom statement.

Broadcom, in Irvine, Calif., envisions combining all these capabilities in products that allow wireless connectivity at a desk, around an office and on the road with automatic roaming between the various types of networks.

A phone with all three types of technology could, for example, let a travelling employee check e-mail via GPRS in the field and on the faster corporate wireless LAN while in a branch office, said Jeff Thermond, vice-president and general manager of Broadcom’s home networking business unit.

In addition, a GPRS handset with wireless LAN and Bluetooth capability could link PCs, handheld computers and headsets to a wireless WAN (Wide Area Network) connection, he said.

“Once you have that (mobile data) capability, then it’s very logical for that handset to have some short-range connectivity to other devices,” Thermond said. In addition to providing that WAN link, such a handset could share its stored information, such as phone numbers and other contact information, with other devices.

“It allows you to create a mobile gateway out of what had been just a voice terminal,” Thermond said.

Although GSM, GPRS, Bluetooth and 802.11b chips may eventually be integrated into a single chip set, handset makers currently are more interested in software that will let customers use the same MMI (man-to-machine interface) with all those networks. The MMI is the distinctive way in which users navigate menus and make commands on each vendor’s handset. Mobilink’s software will allow Broadcom to develop a custom MMI for any customer, Thermond said.

Under the deal, expected to be approved within 60 days, Broadcom would exchange 5.6 million of its shares for all the shares of Mobilink. Broadcom’s (BRCM) shares on the Nasdaq closed Monday at US$33.89, putting the value of the deal at approximately US$190 million. Broadcom will set aside approximately 2 million more shares to be issued to shareholders in the future when certain performance goals are achieved, according to the company. Thermond would not specify the goals but said such conditions usually involve the development and delivery of products.

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