Nvidia buys mobile MediaQ

Computer graphics chipmaker Nvidia said Monday it is entering the wireless device market by buying mobile specialist MediaQ.

Santa Clara, Calif.-based Nvidia sells chips to produce graphics on computer screens. MediaQ, based in the same city, makes processors to improve the display and battery life of handheld devices based on advanced wireless operating systems from Microsoft, PalmSource and Symbian (a partnership of major cell phone makers).

MediaQ's customers include major handheld makers Mitsubishi, Siemens, Palm, Sharp, Philips, Dell and Sony.

The purchase "supports Nvidia's strategy of extending our platform reach and accelerates our entry into the wireless mobile markets," said Nvidia CEO Jen-Hsun Huang.

Nvidia will pay $70 million for MediaQ--mostly in cash--and the deal will close by the third quarter of the graphics chipmaker's 2004 fiscal year, Nvidia said. The company promised to provide additional details about the deal after it announces quarterly earnings on Aug. 7.

Nvidia is the leading maker of graphics chips for PCs and has tried to capitalize on that lead as it enters other markets. It won the contract to supply graphics chips for the Xbox, Microsoft's video game console. It also recently entered the market for chipsets, which are PC components that control basic functions such as memory use.

The chipmaker has been distracted lately, however, by persistent manufacturing problems that resulted in persistent delays in introducing its high-end GeForce FX graphics chip for PCs.