Nvidia buys UK mobile specialist Icera for �224m

Deal highlights increasing competition in tablet, smartphone platforms.

Graphics processor giant Nvidia has bought UK soft modem specialist Icera in a $367m (£224m) deal as it looks to build out a mobile computing platform.

Bristol-based Icera has established itself as a leading player in 3G and 4G baseband chipsets and communications software for the mobile broadband market. Its technology fits well with Nvidia’s drive into general purpose processing, as shown most recently by the high profile win for its dual core Tegra 2 chipsets inside Motorola’s Xoom tablet.

“Both Nvidia and Icera have highly complementary assets with no product overlap at all,” said Sravan Kundojjala of research firm Strategy Analytics “Both companies are heavily focused on addressing the leading-edge device markets.”

The deal also mirrors Intel’s acquisition of Infineon Technologies’ wireless business last August as it also looks to develop a broader mobile/smartphone/tablet offering.

However, Christopher Taylor, also of Strategy Analytics, suggested that both Nvidia and Intel are still going to take a while to catch up with companies that already have mobile platforms, such as Qualcomm, Broadcom and ST-Ericsson.

“[Nvidia and Icera] indicated that baseband integration in Tegra processors is a long-term goal and could take time,” he said. “We regard this situation as similar to Intel-Infineon’s and think it could take three-to-four years for both Intel and Nvidia to field baseband-integrated apps processors.

“Nvidia may also have to acquire a few more companies to fill the connectivity gap in its product portfolio and to position itself as a complete platform player. Neither Nvidia nor Icera offer any connectivity solutions such as Bluetooth, Wi-Fi, GPS, FM radio, NFC [near field communication] or ZigBee.”

Nevertheless, Taylor added that “the NVIDIA-Icera combination could be a potential long-term threat to Qualcomm”.

Icera currently claims the number two position in the mobile broadband market. The company has received $250m in venture capital funding since its launch in 2002, and employs 300 staff. In addition to its UK headquarters, it also has design centres in France, the USA and China.

Nvidia said it would comment further on the deal during its second quarter conference call on Thursday (May 12).

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