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Summary

Intel Corporation has announced plans to acquire Lantiq, a supplier of broadband access and home networking technologies and semiconductors. Germany-based Lantiq was spun out of Infineon Technologies in 2009 and purchased by San Francisco–based equity firm Golden Gate Capital. This acquisition deepens Intel’s position in the connected home market.

Lantiq’s home gateway chips are essential for the smart, connected home

A home gateway device (e.g. residential gateway) facilitates the connection between a home network and a WAN (wide area network) such as the Internet. The communications connection can be wireline or wireless, achieved with copper, fiber, HFC, and 4G LTE. Home gateways support numerous communications functions and are enabling smart, connected home applications.

Lantiq’s chips and related software support home gateway devices. In addition, Lantiq has over 2,000 patents related to broadband technologies. In 2014, Lantiq announced integration of the HAN FUN (Home Area Network FUNctionality) protocol, making it easier for home gateways based on its chipsets to act as home automation hubs, providing support for IoT devices such as smart meters and lighting.

Intel is active in the residential broadband connected home market. According to Intel, this acquisition will expand its presence in the cable residential gateway market and broaden its offerings in other gateway markets, including DSL, fiber, and LTE. Lantiq will be folded into Intel’s Client Computing group.

Intel needs to expand into the home gateway market given competition from the likes of Google, Broadcom, Qualcomm, and Samsung. Google purchased Nest, a provider of smart energy home devices, for $3.2bn in early 2014. In August 2014, Samsung acquired SmartThings, a connected home start-up with single hub technology for smart appliances and devices.

The terms of the deal were not disclosed; it is possible that Golden Gate will lose money. Lantiq had tried to enter the FTTH market with highly integrated GPON CPE chips but failed to generate significant revenues. Lantiq’s refocus on home gateways generated interest from semiconductor giant Intel, leading to a win for Intel and a superb home for Lantiq’s chips and technologies.

Appendix

Further reading

Smart Home: The Broadband Service Provider Opportunity, TE0003-000801 (November 2014)

“BBWF 2014 provides a glimpse into well-positioned access and connected home vendors,” TE0017-000021 (October 2014)

“Connected home: Samsung buys SmartThings,” TE0001-000873 (August 2014)

“Google heats up the smart home market with Nest acquisition,” IT002-000295 (January 2014)

Author

Julie Kunstler, Principal Analyst, Components and Intelligent Networking

julie.kunstler@@ovum.com

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