Comms chips

Atheros: ARMed for Phones?

Wireless LAN chipmaker Atheros Communications Inc. (Nasdaq: ATHR) could be plotting a move into the mobile phone market using technology licensed from ARM Ltd. (Nasdaq: ARMHY; London: ARM), according to analysts.

The Brit chip designer announced today that Atheros has licensed two of its ARM9 RISC processor cores to "improve chip set efficiency and accelerate Java applications." (See Atheros Licenses ARM.) Atheros uses similar processors -- without the Java acceleration -- from MIPS Technologies Inc. (Nasdaq: MIPS; OTC: MIPBV) in its laptop and access point wireless LAN chipsets.

Bob Wheeler, analyst at The Linley Group, says extra onboard processing power and Java support give a clue to the intended applications for Atheros chipsets based on the ARM cores.

"The Java accelerator is kind of specific [to cellphones]... It's an interesting hint that they may be looking at the cellular handset market," he observes.

Wheeler notes that the ARM9 series is already widely used by cellphone and smartphone manufacturers looking for more powerful number-crunching capabilities from their battery-powered devices. This additional processing power is not usually required in desktop or laptop WiFi applications, which make use of the much more powerful CPU already installed in the computer.

"In cellphone applications, you typically want to have an on-chip RISC processor to help offset the load on the main processor," Wheeler says.

Will Strauss, analyst at Forward Concepts Co., agrees that the ARM deal could represent one of Atheros's first steps into WiFi cellphone market.

The chipmaker must have plans to enter this market, he suggests, because its rivals are certainly already talking about it. "They have to, there's no question," Strauss insists.

Texas Instruments Inc. (NYSE: TXN) has already started selling a combined cellular-wireless LAN chipset, while Intel Corp. (Nasdaq: INTC) and Qualcomm Inc. (Nasdaq: QCOM) have both talked about introducing such combo chipsets (see Moto Taps TI for WLAN VOIP, Intel's VOWLAN Bullhorn, and WLAN/WAN, Thank You Qualcomm?).

A spokesperson for Atheros had no comment on how the company will use the ARM cores or any future products.

Wheeler and Strauss agree there's a good reason why chipmakers are interested in combining the two radio technologies: Extending wireless LAN to mobile phones could drastically increase the size of the market for 802.11 chipsets, as the table below illustrates.

Table 1: WiFi Equipped Cellphones (millions of units)
 2003   2004   2005   2006   2007   CAGR 
0.0 4.0 10.8 19.2 27.8 91%
Source: Forward Concepts

— Dan Jones, Site Editor, Unstrung

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