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July 17, 2012, 2:21 a.m.
Patrick Connolly Senior Analyst

Today,CSR announced a conditional agreement to transfer development operations in handset connectivity and location to Samsung for $310 million, with a further $34.4 million invested in CSR.

"Under the terms of the agreement, Samsung will gain full access to CSR’s mobile connectivity and location technology and transfer certain relevant patents, as well as employ over 300 CSR employees in the selected field for the cash consideration of $310 million. In addition, Samsung will receive perpetual rights to CSR’s intellectual property related to connectivity and location technology such as Bluetooth, Wi-Fi and GPS reinforcing Samsung’s leadership in mobile component solutions". This suggests it has as much to do with patent wars as acquiring new technology capabilities.

From alocation point of view, CSR has stated that it plans to focus on 5 core areas, one of which is indoor location. Note, this is not location or GPS but simplyindoor location. It will discontinue investment in its handset connectivity and location technology. Earlier this year, it announcedplans to offer indoor Location as a Service (Laas). This highlights the importance of indoor ( http://www.abiresearch.com/research/1012544 ) and suggests CSR might have something pretty special planned in this area.

On Samsung's side, GPS/connectivity was a hole in itshandset platform business that has now been filled nicely by CSR.

CSR plans toissue $285 million as dividend to its shareholders, which should help to boost its lagging share price.