Feeds

Intersil quits ‘overcrowded’ WiFi, finds sucker to buy

Long odds

  • alert
  • submit to reddit

Boost IT visibility and business value

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 essential guide to IT transformation

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.