Qualcomm has paid £1.6bn ($2.5bn) to acquire UK Bluetooth veteran CSR, with the latter’s advanced mesh technology a key attraction. The addition of meshing to Bluetooth Low Energy (BLE) could strengthen its defences against the Google-backed Thread Alliance in the battle to dominate the smart home, and Qualcomm is always eager to back a key wireless standard.
Some players are promoting 802.15.4 solutions like Thread, 6LoWPAN and ZigBee to challenge Bluetooth’s bid to be the default short-range WPAN connection in the connected household. One of their most powerful arguments is that 802.15.4 standards lend themselves to meshing, which will be important when large numbers of devices need to communicate with one another. By acquiring the wherewithal to help BLE overcome this hurdle, Qualcomm is not only gaining some of the most advanced solutions in this sector, but possibly setting itself up as the godfather of a BLE-based smart home.
Mesh is just one example of how the BLE standard is expanding itself rapidly to address the varied use cases of the IoT. With CSR holding valuable inventions and IPR in many of those areas, Qualcomm will inevitably enhance its position in the Bluetooth world, and the IoT as a whole.
The UK company also has a strong reputation and product line which will contribute to Qualcomm’s immediate silicon offerings, in the smart home and the handset. In both cases, CSR will strengthen Qualcomm in the activity where it shines most brightly, tight integration with WiFi, cellular and other connections, often on the baseband.
Qualcomm said it would gain more “products, channels and customers” in two important areas, the IoT and automotive infotainment. These have been the most important target markets for CSR since it sold its mobile activities to Samsung and reverted to its Bluetooth comfort zone, after several missteps in trying to address a broader technology platform. Among CSR’s key products for the IoT space are the UniFi WiFi chip, which supports WiFi Direct, Soft AP and WiFi tethering as well as low power operation; and the CSR8811 and CSR8311 Bluetooth Low Energy chipsets.
CEO Joep van Beurden said in an interview: “You can see the strategic complement between Qualcomm and CSR – they are the global leaders in silicon for smartphones.”
These two key attractions – advanced mesh technology to feed into smart home standards, and new capabilities for the core mobile baseband/SoC business, show why Qualcomm wanted CSR. The US firm beat an offer from US embedded chip supplier Microchip, whose undisclosed bid was rebuffed in August as being too low. Qualcomm will pay 900 pence per share, 37% above the close on Tuesday, and valuing its prey at 19 times projected earnings – according to Bloomberg calculations, this is above the average of 16.7 times, paid for chip companies over the past 12 months.
Though CSR had remained insistent that it had a bright future without a purchaser, this is clearly a good time to find a new owner with sufficiently deep pockets to ride the storms of competition in the wireless chip market.