Qualcomm to Buy Flarion
Qualcomm Inc. said Thursday that it would buy wireless broadband technology firm Flarion Technologies Inc. to expand its own wireless technology portfolio in a cash-and-stock deal worth about $600 million.
It said it could pay $205 million more if the companies reached certain milestones within eight years of the deal’s closing.
Analysts said the purchase of the high-profile private firm could help Qualcomm dominate future high-speed wireless technologies.
“Both companies are doing well on this deal,” Deutsche Bank analyst Brian Modoff said. “Flarion investors are getting a good exit strategy, and Qualcomm is continuing to have a strong patent portfolio.”
The combination could be bad news for developers of WiMax, an emerging high-speed wireless technology that includes chip giant Intel Corp. among its most prominent backers, Modoff said.
Developers of mobile versions of WiMax -- expected to be based on OFDM, or orthogonal frequency division multiplexing, technology -- could have a “difficult time designing their systems for mobility without infringing Qualcomm patents” as a result of the deal, he said.
The companies combined have more than 300 OFDM patents, according to a Qualcomm executive who said vendors developing WiMax would need to buy licenses for some of its patents.
“We are willing to license these patents on fair and reasonable terms,” Qualcomm President Steve Altman said.
Qualcomm dominates the market for CDMA, or code division multiple access, the most popular cellphone standard in the United States. It also sells licenses and chips for W-CDMA, a high-speed wireless standard that is emerging in Europe and other parts of the world.
Bedminster, N.J.-based Flarion was spun out of the development arm of Lucent Technologies Inc., which no longer has an ownership stake.
Many firms have tested Flarion’s gear in their search for high-speed wireless technology, but it has had little commercial success, as most operators are building networks based on Qualcomm technology.
Shares of San Diego-based Qualcomm rose $1.27 to $40.48.
