Thursday, June 14, 2007
While the IP battle rages, BroadCom is slowly moving towards a more complete UMTS solution. It recently announced a $146+80 million acquisition of Global Locate, a GPS company. Now, they are equipped to enter the niche market of chips with integrated features. With previous Wi-Fi, blue-tooth and FM capabilities and with the new range of GPS products and IP from Global Locate, BroadCom's game would be to bundle all these with its UMTS chip, with the hope of shutting the other small players in the fragmented UMTS market.
As I have mentioned in a previous article, the company with the super-set of features is most likely to have a design win with a device manufacturer since the latter would want to build a single platform to support these chips. QualComm, for example, already has Wi-Fi and GPS assets from Airgo and Snaptrack respectively, and is thereby positioned as a front-runner in the race, especially with superior modems. BroadCom appears a little late in obtaining GPS but then we should remember that the company was getting its act together with the modem performance and interoperability testing earlier. With those issues likely out of the way,it is now attempting to carve a niche or at least is trying to become one of the top 3 UMTS IC supplier with a more complete product offering. Of course, it remains to be seen if the pace of QualComm's R&D efforts can be matched. While the industry is grappling to get the basic HSDPA act together, QualComm is already gravitating towards the next generation HS chips. BroadCom's hope perhaps is that the ITC ban will divert resources within QualComm thereby giving it some extra time to try and catch up with its bitter rival.
Also, it remains to be seen now what Marvell and Free-scale are thinking on the GPS front. They don't have GPS features as yet and there are not too many small companies to grab at now. Would they try to license from the $1.6 billion Sirf or are they likely to take the acquisition route? If it is the latter, the time is running out, both from an availability stand-point and a design-win stand-point. BroadCom is already making noises about making it to the top 5 UMTS IC suppliers. So we should see some more GPS deals soon. I also think that the window of opportunity for all the other players is getting smaller by the day and the weaker/financially poorer ones are likely to be left out. We will see market consolidation in this space and a few clear winners emerging. In the meanwhile, let us wait and watch the frantic action!