Qualcomm makes UK acquisition
Published: 18 Aug 2005 16:10 BST
Qualcomm, the company which owns CDMA 3G technology, has acquired UK firm Elata for $57m (£32m).
Elata specialises in mobile content delivery, allowing operators to sell rich-media content such as wallpapers, games or ringtones to consumers, whatever platform their phone uses — Qualcomm's own BREW or its rival, Sun's Java.
The all-cash deal follows on the heels of the pair's co-marketing agreement announced earlier this year. With a more formal union agreed, Elata will now be integrated into Qualcomm's Internet services division.
Peggy Johnson, Qualcomm's president of internet services, said Elata will be "a nice plug-in to our existing suite of products".
"[Elata] has a nice customer base. It was a piece of our portfolio missing — now we can bring content together, be agnostic about where it comes from and send it off to the user, regardless of the device they use," she added.
It's that customer base that will show whether the deal has been a success, according to Ovum analyst Tony Cripps.
"It will be interesting to see how Elata's existing customers &mash; these include Orange France, Amena, Optimus and a few others including Three UK, which is also a uiOne customer &mash; react to Qualcomm's take over. Especially if these customers decide to broaden the relationship to incorporate other aspects of the previously CDMA-centric BREW environment. Any such reaction would be a strong guide as to whether Qualcomm's software-focused breakout strategy is working," Cripps wrote in a research note.
Qualcomm's new single-system approach is also backwards-compatible, allowing operators to retain legacy systems, a fact that it hopes will ingratiate it with European operators. Qualcomm has yet to make as significant a mark in Europe as it has in the US and other markets.
Elata chief executive Stephen Dunford said the union is expected to go smoothly, following the companies' existing relationship. "It's business as usual," he said. "A lot of the engineering work has already been done." A product based on the two companies' technologies is expected before the end of the year.
The Elata buy is Qualcomm's second in as many weeks. Earlier this month, it spent $600m to acquire broadband wireless access firm Flarion.
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