Qualcomm (NASDAQ:QCOM) is close to finalizing a deal for Israeli Wi-Fi chipset startup Wilocity, according to an Israeli media report, a deal that would bolster Qualcomm's Wi-Fi expertise as the number of Wi-Fi hotspots is set to grow significantly.
The report, from Israeli site TheMarker, said that the deal will be worth around $300 million. According to the report, which did not cite its sources, the terms of the deal are not yet finalized but Wilocity employees were notified two weeks ago that the deal was happening.
Qualcomm and Wilocity declined to comment.
Wilocity was founded in 2007 and has since raised around $105 million from a series of strategic investors, notably Qualcomm and chipset maker Marvell, as well as Cisco and leading venture capital funds including Sequoia, Benchmark Capital, Tallwood Venture Capital and Vintage.
Wilocity's chips use the 60 GHz band to deliver ultra-fast Wi-Fi. Wilocity is one of the most vocal proponents of the 802.11ad standard, which is being pushed by the Wi-Fi Alliance. Qualcomm (NASDAQ:QCOM), Nokia (NYSE:NOK), Samsung Electronics, Nvidia and others are members of the Wi-Fi Alliance, which is working with the IEEE to standardize 802.11ad. The standard promises to transmit data at up to 7 Gbps over short distances in the 60 GHz band (so it would work within a room, but due to the spectrum band likely wouldn't pass through walls).
A deal for Wilocity could allow Qualcomm to incorporate its technology into its devices just as 4K video is starting to take off. The ability to quickly stream ultra-HD video to smartphones and tablets, even in limited contexts, could help Qualcomm stand out.
This wouldn't be the first Wi-Fi-related acquisition for Qualcomm, or even the largest. In 2011 Qualcomm paid $3.1 billion for Wi-Fi chip giant Atheros to give it a leg up in the Wi-Fi market, which for many years has been dominated by rival Broadcom. In 2006 Qualcomm also purchased another Wi-Fi chipmaker, Airgo Networks.
The Wi-Fi market is expected to keep growing at a rapid clip. Wi-Fi hotspot deployments worldwide reached 4.2 million hotspots last year and should exceed 10.5 million in 2018, according to a new report from ABI Research. The estimates include Wi-Fi hotspots deployed by mobile and fixed-line carriers as well as third-party operators.
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