CSR seems to be confident that GPS location technology will soon become a standard feature of mass-market mobile phones.
Otherwise it is doubtful that the Bluetooth chipset developer would have chosen this as the moment to pay £90m for US-based GPS chipset firm SiRF.
GPS location technology has been around in commercial navigation terminals for years and adding it to mobile phones seemed an obvious step.
But surprisingly it has not happened, largely due to the extra cost and space of adding the separate RF circuits and radio transceivers needed for GPS.
Plans in the US to encourage the fitting of GPS location technology to mobiles as a safety feature moved the game along in the past year or so. Now, the appearance of more cost-effective multi-function chipsets incorporating GPS with Bluetooth and Wi-Fi radios is making it happen.
Radio chipset firms such as Broadcom and CSR have multi-function chips incorporating GPS, but while Broadcom bought in established technology with the acquisition of Global Locate in 2007, CSR has been relying on a proprietary software-based GPS transceiver technology.
With the acquisition of SiRF, CSR demonstrates that it is serious about being a major player in the anticipated market for multi-function mobile phone radio chips.
With the mobile industry unlikely to escape the downturn, there are certainly risks associated with CSR’s move, but the Cambridge-based chip firm believed the timing was right.
According to CSR, the GPS attach rate is around 20% of mobile handsets in 2008 and this is expected to double by 2012. But given the strong position of rival Broadcom, maybe CSR felt it had no choice.
“Together we create a group substantially better placed both to meet the challenges of today and to emerge even stronger from the current challenging market conditions,” said CSR CEO Joep van Beurden.
The merger will allow CSR to combine its
Bluetooth and Wi-Fi comms technology with SiRF’s GPS and assisted GPS (A-GPS) patent portfolio in multi-function chipsets, which mobile phone firms want.
And make no mistake, SiRF has some strong GPS technology. Qualcomm recognised this and in October the mobile chipset supplier signed a patent agreement with SiRF.
SiRf’s patent portfolio includes some of the early GPS patents that SiRF acquired through its acquisition of Conexant’s GPS business in 2003, and Motorola’s GPS assets in 2005.
Qualcomm’s agreement with SiRF demonstrated how important GPS technology has become for mobile chip firms and handset manufacturers.
If handset makers are serious about moving GPS-based mobiles into a mass market, and not just in smartphones like the iPhone, the SiRF acquisition will be well-timed. But CSR will be hoping that the worst projections for a prolonged downturn in the mobile phone market do not materialise.