Qualcomm buys software maker for $1 billion
The wireless technology firm says it will acquire SnapTrack, a maker of software that helps locate cell phones, in a stock deal valued at $1 billion.
The San Diego-based firm plans to combine SnapTrack's software with its gpsOne technology for global positioning systems to develop mobile phones, handheld devices and pagers that can be tracked and located in an emergency.
The announcement comes a day after the wireless company warned Wall Street analysts that shipments of its CDMA chips and mobile phones could fall in the second quarter in comparison with first-quarter levels.
Qualcomm stock today fell sharply following the warning, down $24.13, or about 16 percent, to close at $124.88. Shares split 4 for 1 on Dec. 31, 1999.
As a result of the deal, Qualcomm will soon provide services that meet the Federal Communications Commission's mandate that wireless carriers offer technology that can locate a cell phone that has dialed the 911 emergency number.
"This acquisition positions Qualcomm to facilitate existing and new market applications globally serving all digital wireless platforms," Dr. Irwin Mark Jacobs, chief executive of Qualcomm, said in a statement.
"Wireless device manufacturers will benefit from an enhanced product offering for Qualcomm chipsets and software incorporating wireless location features, and wireless carriers will be able to offer a host of innovative new location-based, cost-effective services."
SnapTrack will become a wholly owned subsidiary of Qualcomm. SnapTrack's employees, including its strong engineering base, will remain in San Jose, Calif., supporting a development center for wireless location products.
Qualcomm yesterday reported earnings of $192 million, or 25 cents a share, excluding non-recurring charges, from $49 million, or 8 cents a share, a year earlier. The company had been expected to earn 24 cents a share, according to consensus analyst estimates compiled by First Call/Thomson Financial.