Broadcom Pays $164 Million for Renesas 4G Wireless Chip Unit

Wireless chipmaker Broadcom said today that it will pay $164 million to buy the LTE wireless chip assets of Japan's Renesas Electronics.

Under terms of the deal, a team of chip designers based in Finland, the United Kingdom and India will become Broadcom employees, though the companies aren't yet saying how many people are involved. Bob Rango, Broadcom's executive VP and general manager of its mobile and wireless group, said the group of employees is largely composed of a batch of ex-Nokia chip designers who did some of the early work on setting 4G wireless standards. "This is a very experienced group of designers, many of whom were at the table when the 4G standards were set," he told me.

Broadcom had previously been seen as lagging rivals like Qualcomm in the development of chips for 4G phones.

Renesas had announced that it would stop developing its 4G wireless in June. Rango said the chips are already certified for use by several carriers, including AT&T in the U.S.; Vodafone, Orange and EE in the U.K.; and NTT DoCoMo in Japan.

Broadcom said the deal will cut into non-GAAP earnings to the tune of 12 cents a share when Broadcom reports its results of the quarter ending Dec. 31. It also expects the acquisition will cut into its fiscal 2014 earnings by 10 cents to 15 cents on a non-GAAP basis, but that it will be accretive to earnings starting with the 2015 fiscal year.

The company also boosted its outlook for the quarter ending Sept. 30, saying it now expects to report revenue in the range of $2.075 billion to $2.175 billion, and for gross margins to rise as much as 10 basis points.

Broadcom shares rose in premarket trading by more than one percent, to $25.51 per share.

Fueled by Rise of LTE, Qualcomm Says 500 Phones in the Works Using Its Chips

The global adoption of LTE networks is helping Qualcomm win a spot inside hundreds of phones and dozens of tablets headed to market in the coming months.

"We are very excited about the types of devices that are going to come out," Qualcomm Technologies Executive VP Murthy Renduchintala said in an interview following the company's earnings report on Tuesday. Qualcomm reported results ahead of its forecast, and raised its expectations for the coming year amid stronger-than-expected phone business.

Renduchintala said that at least 500 Snapdragon-powered smartphones and 40 tablets are in the works. Some of that momentum has come as more and more wireless carriers are upgrading to LTE networks - a market Qualcomm has dominated.

New Snapdragon-powered devices range from high-end flagship phones to models aimed at boosting business in lower-end models destined for China and India. Qualcomm plans to announce several new efforts at those emerging markets before the end of the year.

"The holiday season is going to be a very exciting period for us," he said.

Two of Qualcomm's latest design wins were announced this week. Motorola is using Qualcomm's Snapdragon S4 Pro at the heart of the X8 processing engine that powers a series of new Droid models for Verizon Wireless.

Meanwhile, a Qualcomm chip is also powering the new Asus-built Nexus 7 tablet that Google announced on Wednesday. Renduchintala said to expect more tablets running a variety of operating systems to be announced using Qualcomm chips.

"You'll see a number of announcements come out over the next few months," he said.

Japan’s Docomo prepares upgrade to bring 150Mpbs downlink speeds to its Xi LTE network

NTT Docomo, the largest mobile network operators in Japan, announced today that it will be starting prelaunch operations for an upgrade to its Xi LTE network, offering downlink speeds of up to 150 Mbps - similar to speeds being offered by South Korean operators SK Telecom and LG Uplus for their LTE-Advanced services.

Docomo will start verifying its 150 Mbps LTE service in Japan's Kawasaki, Kanagawa Prefecture from July 30 onward, prior to the planned launch of the service in parts of Tokyo, Osaka and Nagoya this October.

Docomo says it has been upgrading its LTE coverage and data transmission speeds consistently, most recently expanding its 112.5 Mbps downlink service to more than 130 cities as of this month. Its latest move has not been termed as LTE-A by the operator, so this is probably an appetizer to the final LTE-A rollout (which is expected to arrive in 2015). In February, Docomo selected Nokia Siemens and Panasonic to upgrade its network with certain LTE-A features like carrier aggregation.

The 150 Mbps service boasts double the speeds of the first LTE network that Docomo rolled out in 2010, though the operator notes it is a theoretical maximum as speeds may vary depending on network traffic or transmission environments.

With its latest move, Docomo has become the first operator outside of South Korea to roll out such high download speeds. Docomo notes that its 150 Mbps LTE network will be compatible with selected handsets introduced from October onward.

Last month, SK Telecom took the wraps off the world's first LTE-A network offering speeds of up to 150 Mbps, which is now operational in Seoul and a further 42 cities across the Gyeonggi-do and Chungcheong-do districts. Subsequently, LG Uplus introduced a rival service earlier this month, which is currently available in Seoul and a few other major cities, but will be made available across South Korea during the third quarter of this year.

Consumers have been quick on the uptake as they display their eagerness for higher speeds - more than 150,000 subscribers signed up for SK Telecom's LTE-A service just 14 days after its launch, making for a take-up rate of more than 10,000 new subscribers a day.

So far, only Samsung's Galaxy S4 LTE-A handset - which launched on the same day as SK Telecom's LTE-A network - runs on the service, though LG and Pantech are reportedly planning to release LTE-A smartphones soon.

US carriers have also been keen to push ahead with their LTE-A plans, with T-Mobile reportedly saying it will roll out LTE-A features later this year and Verizon talking about next-generation speeds.

Image Credit: Yoshikazu Tsuno via AFP/Getty Images