Ambitious chipmaker Nvidia announced a deal to acquire Icera, which was described as “a leading innovator of top-performing baseband processors for 3G and 4G cellular phones and tablets.” Nvidia is paying US$367 million in cash for Icera, a company with more than 550 patents granted or pending worldwide, offering high-speed wireless modem products that have been approved by “more than 50 carriers across the globe.” Together with Icera, Nvidia will be able to offer the two main processors used in smartphones, the application processor and the baseband processor, which will “help OEM customers both improve their time to market and deliver the requirements of next-generation mobile computing.” Nvidia will also have “approximately doubled” its revenue opportunity with each device.

Research firm Strategy Analytics said that while the companies have “highly complementary assets with no product overlap at all,” there are still some hurdles to overcome. It will take some time to complete the integration of the baseband technology with the Tegra processors, a similar process that Intel is currently undertaking following its acquisition of assets from Infineon; and Nvidia still has some “connectivity gaps” in its portfolio when compared to rivals such as Qualcomm, ST-Ericsson and Broadcom, including a lack of Bluetooth, GPS, NFC and Wi-Fi capabilities. Building on its heritage delivering graphics hardware for computers, in recent months Nvidia has been aggressively targeting the mobile space, with some notable design wins to its name. Products using Nvidia’s Tegra technology include Motorola’s Atrix and Droid Bionic smartphones and Xoom tablet, LG’s Optimus 2X smartphone and Optimus Tab, and Samsung’s Galaxy Tab.