Proving the Business Case for the Internet of Things

Lantiq takeover gives Intel power to challenge Broadcom in home gateways, says Sckipio chief

Steve Rogerson
February 11, 2015
 
Intel’s planned takeover of Munich-based Lantiq will provide a viable challenger to Broadcom in the smart home market, believes Michael Weissman, co-founder and vice president of marketing for Israel-based Sckipio, which has worked with Lantiq on the G.Fast broadband communications standard.
 
Lantiq is a supplier of broadband access and home networking technologies. The acquisition should expand Intel’s position in the cable residential gateway market and broaden its offering to other gateway markets, including DSL, fibre, LTE, retail and IoT smart routers.
 
Financial details of the acquisition were not disclosed. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in about three months.
 
“By 2018, we expect more than 800 million broadband connected households worldwide,” said Kirk Skaugen, senior vice president and general manager of Intel’s client computing group. “Intel has been a global leader in driving broadband into the home and to connected compute devices. The combination of our cable gateway business with Lantiq’s technology and talent can allow global service providers to introduce new home computing experiences and enable consumers to take advantage of a more smart and connected home.”
 
But Weissman believes this is more about giving Intel the power to be a serious contender to Broadcom in this market.
 
“This is quite a substantial takeover,” he told M2M Zone, “not so much about what it says about Lantiq but what it says about Broadcom. Broadcom bought a large number of companies and stitched together a monopolistic structure that has caused them to do some very unfriendly things to their suppliers and customers.”
 
He said the problem was that Broadcom not only had the gateway chips but had integrated the access technology, which gave it end-to-end technology in the market and made it difficult for smaller companies to compete. A main rival on access technology, though, was Texas Instruments, which sold that technology to Intel back in 2010.
 
“So now Intel also offers access technology,” said Weissman. “This has been gaining them a lot of share from Broadcom because they are a company of stature and resources. The other small companies don’t own the other pieces of the pie. If you look at the telco side, there was no network processor company of equal size and stature as Broadcom and it was hard for Intel to penetrate with no access technology.”
 
What the deal with Lantiq now does, he said, was extend Intel’s portfolio to include GPON optical fibre technology.
 
“This will let them compete in a way they were unable to compete before,” said Weissman.
 
It also gives them access to Lantiq’s G.Fast broadband technology that works over traditional copper telephone wires.
 
“This was developed in partnership with us and will continue in partnership with us,” said Weissman. “We are an unthreatening partner. We are not in competitive spaces. We have already had good conversations with Intel and expect the partnership to be fruitful. They are buying a company with a gateway product. This means customers will be more willing to make a Lantiq decision on non-technical grounds. There is a lot of buzz that there is now a viable gorilla to compete with Broadcom.”
 
In a smart home, typically, the individual devices will feed information into a central device that will connect with the outside world.
 
“Wearables, for example, are not going to connect directly into data centres,” said Weissman. “No, they will connect to something that connects to something else that connects to data centres. On a home, it is the residential gateway that connects the thermostats, not the PC. The gateway becomes the always-on manager of all the items and routes all this into the cloud. It is not the PC. You can turn the PC off, but the gateway is always on.”
 
He said the gateway would grow in girth while the PC and other devices would become thinner in processing power with more of the functionality happening at the gateway.
 
“Intel recognises this,” he said. “The Lantiq acquisition gives them gateway technology.”
 
The combined Intel and Lantiq will have a range of connectivity and home cloud technologies for OEMs, service providers and companies innovating applications for the home. Together with its IoT range, security products and client devices, Intel will be able to deliver more connected experiences for consumers.
 
“Intel and Lantiq share a common vision about the evolution of the connected home and the intelligent network,” said Dan Artusi, Lantiq CEO. “Together we can drive the transformation of the broadband customer premises equipment as it becomes a smart gateway that connects an increasingly diverse roster of devices and services in the home.”
 
More than 100 global operators have deployed Lantiq’s DSL products. It has more than 2000 patents related to broadband communications and offers technologies including xDSL with vectoring and G.Fast; fibre-based technologies such as fibre to the distribution point and GPON; gateway home networking and DSLTE systems; network processors; and Ethernet and voice products.