Broadcom's Newest Addition

Microsoft (Nasdaq: MSFT  ) , Apple (Nasdaq: AAPL  ) , and Cisco (Nasdaq: CSCO  ) are all competing for space in our living rooms, but another horse that may be worth a bet is chipmaker Broadcom (Nasdaq: BRCM  ) . Its advances in chip functionality are allowing device makers to enhance the at-home entertainment experiences of millions of consumers. Sometimes, however, Broadcom makes an acquisition instead of doing all the development in-house. Its recent acquisition of a small company named Octalica is a case in point.

Octalica's technology will help many of us do something that we can't easily do now -- send media around the house. For example, it's not possible for me to watch a recorded TV program in a different room than the one in which I recorded it, unless I brave the tangle of wires behind the TV stand and lug the DVR to a different room. It sure would be a lot nicer to have one set-top box with a DVR located in a convenient part of my house from which TVs in any room can receive a signal. Unfortunately, even if my DVR was capable of this, sending the signal to another TV isn't easy. Like lots of people, I have a wireless network, but it's susceptible to interference and may not be fast enough -- especially for high-def programs. Category 5 cabling is a good solution if you already have it, but I don't.

A better method, however, is to send media over coaxial cable, since most of us already have these wires in our walls. The Multimedia over Coax Alliance (MoCA) is an industry-driven initiative that is pushing this technology and boasts many large semiconductor companies as members. Broadcom has already announced a decoder chip for set-top boxes that supports media distribution over coax cable, but its acquisition of Octalica for $31 million in cash shows a deeper commitment to the technology. Octalica is a tiny (27 employees), privately held company that designs the chips to support networking of high-def TV content in the home -- its MoCA technology is the first out of the gate.

Broadcom states that the Octalica deal will help it get more capable chips to market significantly faster. Given the numerous small acquisitions it's already made over the past several years, my guess is that this deal will turn out well.

Related links:

• Cisco's Enriching Long-Term Plans
• Broadcom's Right to Remain Silent
• Conexant Comes Up Short

Fool Contributor Dan Bloom has no financial interest in any company mentioned in this column. The Foolish disclosure policy will never be obsolete.