Broadcom Buys More Bluetooth for $49M

By Michael Singer

April 19, 2004

The chipmaker says buying WIDCOMM will help its software relationships with Dell, HP, IBM and others.

Broadband communications chipmaker Broadcom Monday said it will purchase Bluetooth software provider WIDCOMM in a stock and cash transaction worth an estimated $49 million.

The two companies are very familiar with each other after working over the last year on compatibility and sometimes finding their technologies in the same phones, headsets, handheld computers, mice and keyboards.

San Diego-based WIDCOMM's software has been in the market for more than three years and is strongly steeped in Windows-based products as well as other embedded infrastructures.

"We see a great opportunity to use our software in other Broadcom-based system solutions for future wireless products, such as smart phones, consumer devices, broadband gateways and digital set-top boxes," WIDCOMM president and CEO Bob Hunsberger said in a statement.

Broadcom's investment also speaks to the 39 percent of adult surfers who now have a broadband connection at home. DSL is largely responsible for home broadband growth, as Pew Internet & American Life Project reports that DSL subscriptions have catapulted from 28 percent of market share in March 2003 to 42 percent in 2004.

"The acquisition of WIDCOMM should provide many more opportunities for adoption of Broadcom Bluetooth silicon in this rapidly growing market in which we expect to see a 60 percent annual growth rate for chipsets over five years," said Joyce Putscher, Director of Convergence Research at In-Stat/MDR.

By adding WIDCOMM to its fold, Broadcom said it now gains not only 100 end products but also better relationships with more than 80 PC and PDA OEMs including Dell, HP, IBM, Logitech, Panasonic, Samsung, and Sony. Broadcom's current customer list also includes Dell and HP as well as Motorola, and Cisco Systems.

Broadcom is no stranger to Bluetooth, already launching its own Bluetooth-qualified single-chip radio. The company's Blutonium line of products includes devices for mobile phones, PCs and PDAs, as well as application-specific chips for cellular phones and wireless mouse and keyboard applications.

The acquisition is the third in as many months for Irvine, Calif.-based Broadcom. The company recently took over a handful of storage technology patents from Cirrus Logic as well as spending close to $77.5 million for MPEC compression developer Sand Video earlier this month.

Broadcom has been working hard to outdo its competition, which includes Agere, Intel and Texas Instruments, and cuts costs by outsourcing production to Asian foundries such as TSMC, SMIC, Silterra, and UMC.

The boards of directors of both companies approved the merger but now must wait for approval by privately-held WIDCOMM's shareholders and the usual regulatory requirements. Broadcom said the transaction should be finalized by the end of June and has offered to put up $3 million in cash as part of the purchase price to make sure it does.



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