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Broadcom to Buy Femto Chip Startup for $86M

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
10/27/2010

Broadcom Corp. (Nasdaq: BRCM) is on a serious mobile M&A jag, announcing plans to buy up femtocell chip-maker Percello Ltd. for "approximately $86 million" in cash or stock on Tuesday.

The planned buyout comes after the chip-maker announced earlier this month that it will buy Beceem Communications Inc. for US$316 million. (See Broadcom to Buy a 4G Strategy Via Beceem.)

Buying the Israeli femto startup will continue to enhance Broadcom's Long Term Evolution (LTE) strategy while adding small-cell technology to its portfolio. Percello has developed 3G system-on-a-chip (SOC) technology for femtocells and is working on LTE for home basestations. (See T-Mobile Backs Femto Chip Startup and Percello Intros HSPA+ Femto SoC.)

Broadcom could also potentially integrate femtocell technology with some of its own home gateway smarts. The firm now offers a number of reference designs for home gateways.

The move to take Percello puts Broadcom directly in competition with UK-based femto SOC-maker Picochip , which now has its own HSPA+ and LTE home base station silicon designs.

Broadcom says it expects to close the acquisition by the end of March 2011.

— Dan Jones, Site Editor, Light Reading Mobile

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Michelle Donegan
Michelle Donegan
12/5/2012 | 4:20:18 PM
re: Broadcom to Buy Femto Chip Startup for $86M


The word I've heard most today about this deal is "validate," as in Broadcom's interest must mean femtos are about to blossom into something really big. 


I hear some rumblings of momentum building in the market and that femtos will show up in various applications -- whether for enterprise, in residential gateways, or on lamp posts: it's growing, things are good.


But one of the biggest problems with femtos is that most operators don't have the business model right. Operators should offer femtos for free (like Softbank does in Japan), then charge for additional femto-related services.


 

joset01
joset01
12/5/2012 | 4:20:09 PM
re: Broadcom to Buy Femto Chip Startup for $86M


Yeah


Its an interesting strategy from Broadcom. They appear to have bought their way into a multimodal small cell future.

freetoair
freetoair
12/5/2012 | 4:19:58 PM
re: Broadcom to Buy Femto Chip Startup for $86M


But one of the biggest problems with femtos is that most operators don't have the business model right.


>> Hmm. I thought is was the vendors that did not have any business model - much less the right one. Operators crank those out like crazy.


Operators should offer femtos for free (like Softbank does in Japan), then charge for additional femto-related services.


>> how is that going for then? for NTT?
>> what services? how much?


The word I've heard most today about this deal is "validate," as in Broadcom's interest must mean femtos are about to blossom into something really big. 


>> heard from vendors I guess, who need some oxygen
>> blossom into what?
>> sure in US if I have ATT for example, with no signal, I need one. But why the heck is that my problem in 2010? For me it is not as I just use Verizon. Find the iPhone so boring at this point (after using variants since the beginning for app dev) that I have no desire - so no need for Crapple / NoTTA where I cannot even make/take a call


Frankly I do not see femto blossoming into anything that is a "big" revenue generator for anyone - anytime soon.


So why is Broadcom buying?
Gee who knows...safety net, tax writeoff, patent/lawsuit stuff, too much time on thier hands, investor buddies asked for a favor, back room wheeling and dealing amongst money guys, a clear business plan (is near bottom of the list)

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