Qualcomm-Atheros: A Match Made in Mobility Heaven?

Qualcomm, chipmaker for mobile devices, has entered a “definitive agreement” to scoop up Atheros. What’s cooking here? Atheros is known for its wireless and wired networking prowess, especially in the consumer electronics industry. What can such a merging of technologies mean for the future of mobile devices? Read on for some perspective …

Qualcomm’s official press release notes the company is looking to expand its business beyond mobile technology. We’ve already seen that with its Snapdragon ARM CPU, which is a system-on-a-chip design. Now, with Atheros under its belt, Qualcomm has the ability to potentially leverage more networking technologies into its SoC designs.

That speculation is consistent with Qualcomm CEO Paul Jacobs’ statement that Qualcomm is on track to “continually integrate” technologies and believes that Atheros’ addition will broaden horizons in the marketplace while enabling “access to new partners and distribution channels.”

The price tag on the agreement is $45 per Atheros share in cash. That puts Atheros’ value at $3.1 billion. The move has been approved by the Qualcomm and Atheros boards, with the transaction to close in the first half of 2011. Qualcomm believes the acquisition will be “modestly accretive” to its earnings in FY 2012.

It’s my theory that this acquisition will have an impact on future SoC designs and on mobile CPUs in general. By the end of 2011 I fully expect a mobile market rife with compact and powerful mobile CPUs that change the paradigm of what can be accomplished on a small platform. Network connectivity is key for any mobile device, so the Atheros buy is a smart one on Qualcomm’s part.

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