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Qualcomm to buy British chipmaker CSR for $2.5B

Qualcomm expects to close the deal by the summer of 2015, giving it a boost in automotive and connected devices.

Qualcomm CEO Steve Mollenkopf says the CSR deal "will unlock new opportunities for growth." CNET

Hoping to capture some of the growth in the Internet of Things and automotive infotainment, wireless chips giant Qualcomm agreed Wednesday to buy British chipmaker CSR for $2.5 billion.

CSR, based in Cambridge, England, should help Qualcomm become a bigger player in portable audio, automotive and wearable devices thanks to its technologies focused around auto, voice, music and short-distance Bluetooth wireless connections. CSR has 2,130 employees in eleven countries and reported revenue of $960.7 million for its latest fiscal year.

The deal was unveiled soon after rival chip maker Microchip made a bid for CSR for an undisclosed sum, which CSR in August said it rejected.

Qualcomm, which expects to close the deal by the summer of 2015, already has a strong position providing chips for mobile devices, but its executives have discussed their interest in growing into automotive and the Internet of Things, a concept of connecting objects such as clothing and lights to the Internet and each other. The CSR deal "will unlock new opportunities for growth," Qualcomm CEO Steve Mollenkopf said in a statement Wednesday.

Patrick Moorhead, founder and president of Moor Insights & Strategy, said the deal gives Qualcomm a type of Bluetooth technology that it could use to bolster the AllSeen Alliance, an Internet of Things standards group it helped start last year. The "CSRmesh" Bluetooth technology is similar to what's being offered by Thread Group, an Internet of Things organization started by Google, Samsung and others. "This looks like the potential for a competing standard," he said.

In July, Qualcomm bought startup chipmaker Wilocity, which develops chips using a newer type of Wi-Fi called WiGig that provide a short distance but fast connection between devices. Because of its speedy connection, WiGig is seen as a potential replacement for physical cables still necessary to connect devices such as tablets or PCs to large displays or televisions.