Qualcomm is best known for developing the code division multiple access standard used in cell phones and networks throughout the U.S. and Asia. But as emerging technologies begin to compete with CDMA, Qualcomm looks to add other wireless patents to its portfolio. Flarion will help the company do that, says Qualcomm Chief Executive Paul Jacobs.

"Most see Qualcomm only as a supplier of CDMA technology," Jacobs said. "Our intent is to be a broad-based supplier of wireless technologies."

The deal helps ready Qualcomm for the next wave of wireless innovation. Third-generation, or 3G, phones — with fast Internet access — are already taking root. And so-called 4G phones are in the works.

"Flarion has the next generation of 4G technology for wireless," said Ragu Gurumurthy, a vice president at consulting firm Adventis. "Qualcomm has to ask what the future is beyond CDMA."

Bedminster, N.J.-based Flarion's gear provides high-speed wireless access to mobile devices. It mainly relies on a technology standard called orthogonal frequency division multiplexing, or OFDM.

OFDM is already used in home wireless gear, digital subscriber lines and the new WiMax wireless system. Flarion, though, has tweaked OFDM so that it can work as a mobile wireless standard in portable devices — rather than just in stationary wireless or landline networks. "OFDM is not unique to Flarion," said Mike Thelander, head of wireless consulting firm Signals Research. "What Flarion has done is mobilize OFDM."

Late last year, Nextel Communications (NXTL) began testing Flarion gear as a way to deliver wireless broadband Internet access to laptops.

After agreeing to merge with Sprint, (FON) Nextel dropped the test. Sprint-Nextel will offer wireless broadband using Qualcomm's own 3G CDMA.

For as long as it lasted, the Nextel test went well, Thelander says. Still, Flarion needed the cachet of a larger company to go further, he says. "Flarion needed other device makers and chipmakers to make their products on a big scale," Thelander said. Aside from the Nextel test, Flarion's gear is also being tested in Europe and Japan.

Flarion's revenue is minuscule at this point, so it won't add to Qualcomm's bottom line. Costs of the acquisition, including taking over the Flarion employee stock option plan, should dilute Qualcomm's fiscal 2006 earnings by 3 cents a share. Not including those costs, analysts expect Qualcomm to earn $1.43 a share in fiscal 2006, which ends in September of that year.

In addition to the $600 million purchase price, Qualcomm may pay out another $200 million if Flarion hits certain milestones. The deal's value was based on Flarion's engineering and patents, Jacobs says, since the company has just 200 employees and virtually no sales.

Although CDMA will remain an important wireless standard, Qualcomm has to prepare for the future, Thelander says. "Qualcomm's thinking is, 'What do we do next?' " he said. "It's a foregone c