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RF Micro To Buy IBM's GPS Operations

The chipmaker will incorporate IBM's GPS engineers and marketing specialists into its own operations, adding two design centers. RF Micro also plans to build GPS capabilities into mobile phones.
RF Micro Devices Inc. will purchase IBM's global positioning system operations, setting up the chipmaker to provide circuits for the burgeoning market of handheld tracking devices.

Under the terms of the deal, RF Micro, based in Greensboro, N.C., will incorporate IBM's GPS engineers and marketing specialists into its own operations, adding a design center in Fishkill, N.Y., and one in Irvine, Calif. The purchase is expected to be completed in the company's third quarter, which ends Dec. 31. Financial details were not disclosed.

GPS devices, which use satellites to precisely identify geographic locations, are commonly used to track vehicles and as navigational tools when paired with digital maps to provide detailed directions. With this deal, RF Micro says it also aims to build GPS capabilities into mobile phones, letting emergency workers track down people who call 911. The Federal Communications Commission has mandated that all wireless phones should have these "E-911" capabilities by the end of 2005.

Linley Group analyst Linley Gwennap says the GPS chip market is about to boom. "As these things get cheap enough, it makes sense to keep track of other things, like suitcases or pieces of equipment," he says. GPS chips could even be used in PDAs to locate such things as the nearest ATM, he says. "There's a lot of interesting things you can do."