Broadcom will buy its way into the 4G chip market with its acquisition of Beceem, which it announced yesterday.
Scott Bibaud, Broadcom's general manager of mobile platforms, says the company knew it would have to enter the LTE and WiMAX market with an acquisition because of its heavy investment in 3G technologies.
"We moved resources into 3G so we could focus on more near-term revenue opportunities, and we were very successful on that," Bibaud says. "We decided to start looking at star-tups to have an acquisition path that would get us to 4G."
Broadcom finally settled on Beceem, a chipmaker with strength in the WiMAX market. Beceem also offers a dual-mode WiMAX/LTE chip that will sample to customers in the first half of 2011.
Calling Beceem's technical team "astonishingly good," Bibaud says Broadcom was attracted by the chipmaker's competitive spirit, experience in OFDMA technology and the quality of its employees.
Though Broadcom would have preferred Beceem's LTE solution be "earlier to market," Bibaud says that Broadcom is comfortable that Beceem's solutions will form a solid foundation for future products.
Broadcom will acquire about 200 Beceem employees when the deal closes late this year or in early 2011. The company doesn't plan large-scale layoffs, but Bibaud warned that "whenever there's a merger of a smaller company of a larger company, there might be some functions that don't fit." Beceem will be assimilated into Broadcom, where it will become a Broadcom product line.
The acquisition will strengthen Broadcom's position in mobile broadband data cards. The company's chip lineup already includes 3G, GPS, Bluetooth and other wireless technologies, so the addition of WiMAX and LTE could make its products more attractive to customers.
Looking forward, Bibaud says the company has its eye on high-end smartphones, particularly those with WiMAX and LTE connectivity.