Feeds

Qualcomm gobbles Atheros, arms self for coming tablet wars

Wireless boom set to keep on booming

High performance access to file storage

Wireless telecommunications chip giant Qualcomm is spending $3.1bn to buy partner Atheros Communications, betting big on the future of Wi-Fi wireless communications.

Qualcomm is one of the darlings of the dot-com boom that kept right on booming as people all over the world cut their phone lines and moved to wireless phones. The company had just under $11bn in revenues in its fiscal 2010 year ended last September and brought an astounding $3.25bn to the bottom line.

Not surprisingly the San Diego-based company remains one of Wall Street's favorites, and at the market close yesterday had a market capitalization of just under $80bn. Qualcomm ended its fiscal year with $3.55bn in cash, $6.73bn in marketable securities, and only $1.1bn in debt. Qualcomm could easily write a check to buy Atheros, and did. The word on the street was that Qualcomm would pay as much as $3.5bn to get its hands on the Wi-Fi chip maker.

There has been a run up in Atheros' stock since it hit a low of $22.77 back in September, and the company's stock closed at $44 a share yesterday, up from around $36 a share as 2010 came to a close and 2011 got going. Rumors hit yesterday afternoon that Qualcomm was working on a deal, which is why Atheros' stock was up like a shot, almost matching the $45 a share that Qualcomm is offering to take control of the Wi-Fi chip maker.

Atheros is located in San Jose and has booked nine consecutive years of revenue growth; it has more than 1,700 employees, who design and peddle single-chip wireless systems that are used in laptop computers, retail devices, various consumer electronics, and carrier and enterprise networking products.

The company's chips are used in Ethernet controllers, transceivers, and switches; Atheros also makes chips for Bluetooth and GPS protocols. About half of its sales come from networking product makers, with a little less than a quarter coming from computer makers and a little more than a quarter coming from consumer electronics gadget hawkers.

Atheros just ended its financial year in December and has not yet reported its results, but in the trailing 12 months that match up with Qualcomm's fiscal year, Atheros had sales of $885.7m and net income of $93.2m. It had $109.8m in cash and $379.2m in securities in its cash hoard last September and has no debt, which makes the deal even sweeter for Qualcomm.

Qualcomm says that the boards of directors for both companies are behind the deal and that it expects the deal to close sometime during the first half of 2011 and that if you exclude amortization of acquired assets then Atheros will add to Qualcomm's earnings in its fiscal 2012.

Craig Barratt, who is president and chief executive officer at Atheros (and not to be confused with a man of similar name who formerly ran chip maker Intel), is staying on at The Q to be president of its Networking and Connectivity division. ®

High performance access to file storage

More from The Register

next story
Report: Apple seeking to raise iPhone 6 price by a HUNDRED BUCKS
'Well, that 5c experiment didn't go so well – let's try the other direction'
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Samsung Galaxy S5 fingerprint scanner hacked in just 4 DAYS
Sammy's newbie cooked slower than iPhone, also costs more to build
Feast your PUNY eyes on highest resolution phone display EVER
Too much pixel dust for your strained eyeballs to handle
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Nvidia gamers hit trifecta with driver, optimizer, and mobile upgrades
Li'l Shield moves up to Android 4.4.2 KitKat, GameStream comes to notebooks
AMD unveils Godzilla's graphics card – 'the world's fastest, period'
The Radeon R9 295X2: Water-cooled, 5,632 stream processors, 11.5TFLOPS
Sony battery recall as VAIO goes out with a bang, not a whimper
The perils of having Panasonic as a partner
NORKS' own smartmobe pegged as Chinese landfill Android
Fake kit in the hermit kingdom? That's just Kim Jong-un-believable!
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.