Feeds

Intersil quits ‘overcrowded’ WiFi, finds sucker to buy

Long odds

  • alert
  • submit to reddit

HP ProLiant Gen8: Integrated lifecycle automation

The writing is on the wall for WiFi chip suppliers. The WLAN market may be about to boom, but the main beneficiaries of the boom look like being Cisco and Intel - so Intersil has sold off its Prism line of chips to someone who thinks they can out-think those two giants.

The brave buyer is GlobespanVirata, which has agreed to pay $365 million for Intersil's WiFi chip business operation - a price which will look cheap, if GlobespanVirata can get as good a market share in the future as Intersil has today. But that doesn't look certain.

When you move house, it's important to make it clear that you'd love to stay there, because it's a great place to live. "The challenges of the WLAN evolution are resulting in even greater differences in the business models of Intersil’s High Performance Analog Product Groups and its Wireless Networking Product Group," said Rich Beyer, President and CEO of Intersil.

What observers are likely to suspect is that he can see Intel eating away at the market for plug-in WiFi cards at one end of the market, and Cisco plotting to disable all competitors at the Access Point end of the market.

This takes roughly half of Intersil's revenue away. The company's 2003 first quarter sales in wireless LAN were $49 million, with remaining revenue of $51 million in its analogue electronics business, which it will retain.

Observers have suggested that the deal may work for GlobespanVirata, even if competition gets tougher, because the company has a thriving "fabless" semiconductor business making DSL chips for broadband. Increasingly, broadband modems are required to include wireless, making it a captive market.

Some observers think that Intersil has been scared by the big-time arrival of Broadcom on the market, with the early version of 802.11g late last year, six months ahead of the ratification of the standard. That was a ploy that paid off for Broadcom, increasing total market sales by a lot more than a factor of two.

Most of that growth went directly to Broadcom and its customers. GlobespanVirata is taking a big gamble.

© NewsWireless.Net

Some recent articles on Newswireless.Net
WiFi org starts testing for fast 11g compatibility. A secret at WiFi org!
Voice over Internet gets another vote: Agere goes for WiFi phones

The Power of One Infographic

More from The Register

next story
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Rural mobile coverage: Tweeting twits to join chirping tits in UK's national parks
Yup, someone IS gabbering behind you on the hiking trail
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.