Intel Corp. (Nasdaq: INTC) has acquired the assets of wireless LAN and Bluetooth chip startup Mobilian in a move that should increase the chipmaker's capabilities to deliver wireless chips for phones and other devices.

Intel has not yet officially announced the acquisition, but company spokesman Dan Francisco confirmed Friday that the two companies signed a letter of understanding cemmenting the deal on October 31. Financial terms of the deal have not been disclosed.

Mobilian was working on "TrueRadio" chipsets that combine both short-range Bluetooth (1 Mbit/s over 2.4GHz) and 802.11b (11 Mbit/s over 2.4Ghz) specifications, intended for phones and other battery-powered devices. "They were the first company to deliver an integrated wireless LAN and Bluetooth chipset," notes Francisco.

Intel believes the acquisition will help advance its overall wireless chip strategy. "We want to be a leading supplier of wireless silicon building blocks," Francisco says. The firm is already committed to spending hundreds of millions of dollars on the development and marketing of its Centrino wireless LAN chipset for notebook computers (see Centrino: How Much?).

Since its founding in February 1999, Mobilian has garnered more than $70 million in funding. At its peak, the firm employed around 120 people in three locations: Hillsboro, Ore.; San Diego; and Yokneam, Israel. There's no word yet on what will happen to these facilities.However, analysts say that it is unlikely Intel paid anything like $70 million for the firm. "My guess is that it is sort of a firesale," says The Linley Group analyst Bob Wheeler. "They hadn't raised any money since mid-2001, so they were basically running on fumes..."Intel could probably use the Bluetooth technology, and Mobilian is right there in their backyard."

— Dan Jones, Senior Editor, Unstrung