LONDON – GPS and wireless chip company U-blox AG (Thalwil, Switzerland) has acquired startup LTE chip company Cognovo (Cambridge, England) for $16.5 million.
The move follows the announcement of the planned acquisition by U-blox of another significant LTE company 4M Wireless Ltd. (Luton, England) in April. The price to purchase 4M Wireless was given as $9 million. 4M Wireless is a leading developer of communications protocols based on the 3GPP Long Term Evolution (LTE) standards.
4M Wireless has licensed a number of companies to use its protocol stacks including Blue Wonder Communications now part of Intel, Wintegra acquired by PMC-Sierra, Sandbridge Technologies acquired by Wuxi DSP, Ceva, Tensilica, MIPS Technologies Inc. At the most recent Mobile World Congress in February 2012 Cognovo demonstrated an LTE protocol stack running 4G cellular communications on its SDM baseband chip.
4M Wireless, with more than 50 employeers, is headquartered in the U.K. with an engineering office in Pakistan. The 4M Wireless deal is expected to close by September 2012 while the Cognovo deal has been completed.
Cognovo, with 30 employees and investment from ARM Holdings plc, was engaged in soft-modem chip development. Its acquisition extends U-blox' ability to create products that require 4G communications combined with global positioning.
U-blox said it intends to combine the technologies of Cognovo and 4M Wireless to create a wireless modem platform based on wholly-owned IP.
"This allows us to meet market demand for connected systems that require positioning, connectivity and application-specific functionality on a single integrated circuit," said Thomas Seiler, CEO of U-blox, in a statement. "This new foundation broadens our serviceable market, and will increase our margins in the automotive, consumer and industrial sectors. Our first 4G product is planned for 2013."
"With over 300 man-years of R&D invested in our SDM technology, this acquisition brings together the industry's most advanced software modem development platform with some of the best IC design and GNSS engineers in the world," said Gordon Aspin, CEO of Cognovo, in the same statement.
Founded in 1997, u-blox is listed on the SIX Swiss Exchange.
Holding most of the patent of a positioning, connectivity and application-specific functionality on a single chip will make monopoly of U-Blox in the segment. Very good strategy from the U-Blox Management.
Also interesting that 4M Wireless had a very similar strategy to that of TTP in the 3G generation.
It amazes me that 4M Wireless was only valued at $9 million, while Cognovo was valued at $16.5 million.
4M Wireless ought to have a revenue stream from Intel pending while we don't know of any Cognovo design wins.
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