Qualcomm gains an ally in its renewed war with Broadcom

By Scott M. Fulton, III | Published October 10, 2008, 11:57 AM

The leading provider of chipsets for the world's GPS devices is no longer seen as unchallenged in that department, and in August was handed a crushing defeat at the hands of Broadcom. Now, the enemy of its enemy may be its newest friend.

Last August 8, a judge with the US International Trade Commission found that SiRF Technology, a company that builds the chipsets used in a sizable, but slipping, majority of the world's GPS systems, were infringing upon six US patents from a Broadcom subsidiary directly related to the sensitivity of GPS devices. That subsidiary is called Global Locate, Inc., and it too makes GPS chipsets.

The finding was seen as precipitating a shift in suppliers by major GPS device manufacturers, including Magellan, TomTom, and Garmin, away from SiRF and toward Global Locate and competitor STMicroelectronics. Two years ago, SiRF was believed to be at the heart of 90% of the world's stand-alone GPS devices; this year, estimates were closer to 70%.

When the USITC decision was handed down, analysts saw it as the final nail in SiRF's coffin. TheStreet.com's Alexei Oreskovic wrote at the time that the decision "marks the end of any reason to care about a company that once seemed poised to be a central player in a new world of iPhone-like gadgets."

This morning, SiRF announced it's been informed that the USITC will hear its appeal of that August decision. At the very same moment -- and probably not coincidentally, SiRF also announced it was entering into a "Patent Non-Assertion Agreement" -- a kind of covenant -- with Qualcomm, Broadcom's arch-enemy and the latest target of a fresh set of Broadcom lawsuits.

Qualcomm already produces the gpsOne chipset, which is an assisted GPS (A-GPS) system that merges data from cell phone towers and GPS satellites to cross-validate a user's location. As you can imagine, that technology is used in wireless handsets with built-in GPS technology, ostensibly to aid carriers' e911 services. Such chipsets currently appear in devices such as HTC's Touch and Mogul, and Palm's Treo 900w, although it's been up to carriers such as Sprint and Verizon Wireless to turn on their capabilities within their customers' service areas.

As analysts see SiRF's lead in stand-alone GPS chipsets slipping, its partnership with Qualcomm could give it a leg up in the field of phone-based GPS, where many believe the real emphasis in global positioning technology is headed anyway.