Graphics card and processor vendor nVidia has signed a definitive agreement to acquire wireless graphics firm MediaQ, in a bid to increase its reach into the mobile market.
The acquisition, which is expected to be completed in nVidia's third quarter 2004, has been approved by both companies' boards of directors, but is still subject to regulatory requirements and other closing conditions.
Under the terms of the agreement, nVidia will acquire privately held MediaQ for $70m, mainly in cash.
Elie Antoun, chief executive of MediaQ, said: "We are delighted to join forces with nVidia. Our customers will benefit from its technology and engineering resources, manufacturing prowess and global support infrastructure."
Jen-Hsun Huang, chief executive of nVidia, said: "This move supports our strategy of extending our platform reach and accelerates our entry into the wireless mobile markets.
"It also extends our competencies in ultra-low-power design methodologies and system-on-chip designs, as well as the Microsoft Pocket PC, SmartPhone, Palm and Symbian operating systems."
Andy Brown, programme manager for mobile devices EMEA at research firm IDC, said that the move made sense.
"NVidia plays pretty strongly in the PC space and one of its main competitors is ATI Technologies," he said.
"If you look at the fact that in the past ATI has made more strategic acquisitions in the mobile device arena, and look at how that area is growing, you can see why nVidia has made the move. MediaQ is a significant player in the mobile space."
Brown added that the acquisition will allow nVidia to grow in the Smartphone and Symbian markets, an area for which IDC has forecast significant growth over the next two years.
"From a strategic point of view it is a wise move. It gives nVidia a play across the whole spectrum, allowing it to match its competitors," he said.
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