Broadcom buys Innovision for NFC growth

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Broadcom buys Innovision for NFC growth

UK-based company gives chip major an entry to handset payments

By CAROLINE GABRIEL

Published: 18 June, 2010

READ MORE: M&A | Broadcom | NFC

Broadcom's progress in the cellular baseband has been slow, but it has gained a strong position in other mobile connectivity, providing single-chip architectures spanning Wi-Fi, GPS, Bluetooth and FM. Now it looks to be adding NFC (Near Field Communication) to the mix, acquiring UK-based pioneer Innovision as vendors start to integrate the technology into handsets for payment and transport applications. Broadcom's timing is usually impeccable, and it managed to announce its purchase on the same day that Nokia pledged to incorporate NFC in its smartphones during 2011.

Innovision specializes in two ultra-short range wireless standards, RFID smart tags and NFC, the key technology for contactless payments and other swipe-based activities. NFC - which is based on RFID - has been used for cashless payments, transport systems and other purposes, mainly within dedicated smartcards, but is just finding its way into handsets, which will avoid the need for separate payment cards. Japan has been the main deployer of handset-based payments, but these have largely used proprietary implementations.

Nokia has led the way in using standard NFC in low cost devices geared to emerging markets, notably its 6216 Classic, announced a year ago. Speaking at the Moby Forum event last week, Nokia's VP of markets, Anssi Vanjoki, said NFC would be included in a wider range of devices from 2011. In addition to emerging market phones like the Classic range, NFC will turn up in high end smartphones, including those products Nokia releases next year for the future generation of its main OS, Symbian^4. Vanjoki added that his company would make tools available so developers could leverage NFC capabilities in their mobile apps. This is good news for NFC - Nokia, despite its early commitment, had seemed hesitant at the smartphone end, complaining the user experience was not yet adequate. Samsung has an NFC-enabled handset, the Player One, now in trials with Orange France.

Last fiscal year Innovision made a net loss of £2.4m on sales of £2m and spent £2.3m on developing NFC IP. Broadcom will pay $47.5m in cash, an 84% premium on market value.

Like Broadcom, Qualcomm aims to offer highly integrated chipsets incorporating cellular radios, Wi-Fi, GPS and Bluetooth, and incorporated NFC in some products for the first time over a year ago - though some believe it could look for its own acquisition to boost its efforts. There are many other players, including market leader NXP (which has significant IPR thanks to its Philips heritage) and several specialists like InsideContactless of France and Polaric of Denmark. STMicro will go commercial within the next few months and there is a Chinese player called Shanghai Fudan Microelectronics, which has supplied NFC chips to at least two local phonemakers.

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