As if the wireless market weren't interesting enough, Qualcomm (NASDAQ:QCOM) just played a trump card on competitors by announcing the acquisition of privately held Flarion Technologies of Bedminster, N.J. The deal commandeers coveted intellectual property in an advanced form of wireless technology that is expected to be the basis of broadband wireless systems well beyond this decade.

The deal will cost Qualcomm $600 million in cash and stock up front, with future earn-outs of $200 million also possible. This marks Qualcomm's largest acquisition since it paid $1 billion for Snaptrack's GPS technology in 2000.

On the surface, some investors are asking why Qualcomm would pay such a price for a private company that reportedly garners little revenue. After all, Flarion has only 200 employees and has yet to show significant traction in commercial markets based on its proprietary Flash-OFDM technology. For those following the behind-the-scenes tussles for dominance of wireless technology standards, however, it was a prescient move by Qualcomm.

Since Qualcomm's dramatic rise in 1999 -- and subsequent fall -- different camps of investors have been debating just what would unseat Qualcomm's dominance in garnering royalties from products using its CDMA technology. Since Qualcomm earns more than a billion dollars annually from patent licensing, investors are keen to see this high-margin revenue stream continue to grow. Acquiring Flarion can be utilized as part of both a defensive and offensive strategy to perpetuate Qualcomm's licensing business.

Intel (NASDAQ:INTC) has chosen to back wireless broadband technologies Wi-Fi and the coming WiMax, which some pundits predict will unseat the dominance of cellular technologies such as Qualcomm's favored CDMA. While Qualcomm has long downplayed the threat, Flarion's technology will give them leverage to offer an alternative -- particularly, to the mobile version of WiMax. It could also give it ownership to essential patents in the eventual standard. If Qualcomm chooses to press for royalty on standardized proprietary products, the uproar would rival the "holy wars" instigated in the 1990s.

Regardless of how Qualcomm chooses to play this, there's no question that it is a major move by the company -- one that will have many long-term implications in the market. In a future column, I'll go through several important aspects of the Flarion acquisition and what new dynamics come into play.

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Fool contributor Dave Mock thinks Flash Gordon was the coolest. He owns shares of Intel and Qualcomm and is the author of The Qualcomm Equation . The Motley Fool has a disclosure policy.