Qualcomm snaps up small cell firm DesignArt Networks

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Qualcomm (NASDAQ:QCOM) put the rumors to rest and confirmed that it bought Israeli small cell firm DesignArt Networks. The chipset giant hopes to use the acquisition to bolster its position as a key provider of chipset and network architecture products for heterogeneous networks, or HetNets, which rely in part on small cells.

Financial terms of the deal were not disclosed, though reports have suggested varying amounts. According to a report in Israel's Globes, Qualcomm is forking over $120 million to $140 million. However, a LightReading report suggests Qualcomm paid $80 million, plus up to $20 million more pending performance. 

Based in Ra'anana, Israel, DesignArt offers system-on-chip (SoC) and software products that enable the design of indoor and outdoor small cells and remote radio heads. The company, founded in 2006, says applications for its products include small cells, unified mobile backhaul and compact BTS equipment. The vendor was an early supplier of SoC solutions for WiMAX radio access network infrastructure.

For Qualcomm, small cells represent another area in which it can develop expertise and, more importantly, relationships with carriers and vendors looking to deploy small cells. Small cells are already in use by many carriers and are expected to grow in popularity as operators search for ways to enhance network capacity in the years ahead.

In its announcement, Qualcomm noted that small cells and Wi-Fi will be increasingly merged with other wireless network technology in HetNets. Qualcomm may decide to merge DesignArt with its Atheros division; Qualcomm acquired Wi-Fi chipmaker Atheros for $3.1 billion in early 2011.

According to the research firm the Dell'Oro Group, the total mobile RAN market, including macro and public-access small cells, is expected to grow at a CAGR of 2 percent between 2011 and 2016. The public-access small cell market is expected to generate significant revenues in the outer years of the forecast period and account for 9 percent of all RAN revenues in 2016, said Dell'Oro.

During the Mobile World Congress trade show in February, DesignArt cited reports stating 90 percent of carrier-grade, non-line-of-sight backhaul equipment for 3G small cells is now based on the company's SoC platform. Also during MWC, DesignArt announced that two of its customers were in field trials and initial service deployments with single-chip LTE base station equipment based on its small cell DAN3400 SoC platform. In addition, the company unveiled the latest release of its Unified Mobile Backhaul software pack for quad-carrier, wide-channel mobile backhaul operating on its DAN3200 SoC platform.

For more:
- see this release
- see this Globes article
- see this GigaOM article
- see this LightReading article

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