Qualcomm to Buy Chip Vendor CSR in IoT Bid

Qualcomm will pay $2.5 billion for CSR, whose Bluetooth and other connectivity technologies will bolster the chip maker's IoT ambitions.

Internet of things

Qualcomm officials are pushing forward the company's efforts around the Internet of things with the planned $2.5 billion acquisition of British chip maker CSR.

CSR has expertise in a range of areas, including Bluetooth technology, automotive infotainment and indoor location, all of which are expected to become increasingly important as the Internet of things (IoT) expands.

Having those capabilities in the fold will help Qualcomm with its growing IoT ambitions, according to CEO Steve Mollenkopf.

"The addition of CSR's technology leadership in Bluetooth, Bluetooth Smart1 and audio processing will strengthen Qualcomm's position in providing critical solutions that drive the rapid growth of the Internet of everything, including business areas such as portable audio, automotive and wearable devices," Mollenkopf said in a statement. "Combining CSR's highly advanced offering of connectivity technologies with a strong track record of success in these areas will unlock new opportunities for growth."

Qualcomm, the world's top vendor of chips for mobile devices, has been expanding its IoT efforts in recent years, and officials said CSR's technologies will add to the company's plans in such growth areas as IoT and car entertainment systems.

They expect to close the deal by the end of summer 2015.

The IoT envisions massive numbers of smart devices and systems—from smartphones and tablets to industrial systems, cars, home appliances and light bulbs—that connect to the Internet and each other, exchanging huge amounts of data that can be collected and analyzed. Cisco Systems has estimated that by 2020, there will be 50 billion connected devices worldwide. And analysts expect the market to be huge; IDC is estimating that by the end of the decade, IoT-related revenues globally will reach $7.1 trillion.

Most tech vendors and component makers are making a push to grow their capabilities, with some like Cisco and Intel creating business units around the IoT. Qualcomm is no exception. The company's Atheros subsidiary a year ago launched the QCA4002 and QCA4004 networking chips that are designed to enable users to add WiFi capabilities to any product, which will allow them to connect to the Internet and become part of the IoT. The chips are aimed at such applications as home appliances (including air conditioners, refrigerators and washing machines), consumer electronics, and sensors for such systems as residential lighting and security.

In September, Qualcomm officials rolled out a development kit to make it easier for hardware and software developers to access the company's low-power wireless platforms and build devices and applications for the IoT. The development kit includes such features as support for the AllSeen Alliance's AllJoyn open-source code for enabling greater connectivity among connected devices and systems, and cloud connect services enabled via 2lemetry's ThingFabric IoT platform.

Qualcomm is a founding member of AllSeen, which launched in December 2013, and its engineers developed AllJoyn before giving it to the open-source group, which is under the auspices of the Linux Foundation.

Qualcomm also has made distribution deals with channel partners Arrow Electronics and CODICO GmbH to give hardware and software makers new avenues for getting access to the chip maker's technology.

According to a Reuters report, chip maker Microchip Technology had been courting CSR, but the British company rejected an offer, saying it was too low. The two companies reportedly were still in talks when Qualcomm entered the picture.