Qualcomm, AT&T bank on Firethorn

Qualcomm is expanding its broad wireless technology portfolio to mobile banking, revealing today its intent to shell out $210 million to acquire Firethorn, an early pioneer in the field. The deal comes just one day after AT&T announced plans to role out a mobile banking service nationwide, using Firethorn’s platform.

At CTIA Wireless in April, AT&T said it would deploy a phone-based client that would allow its customers to access their bank accounts, pay bills and transfer funds over a secure 3G or Edge connection. That secure client and server solution are based on the Firethorn platform, which AT&T said can be supported on 30 existing handsets representing nearly half of its overall subscriber base. Of the four banks that originally agreed to participate in the program, regional bank BancorpSouth was the first to go live, followed by several other small local financial institutions, but AT&T said the first major U.S. bank with nationwide branches Wachovia is going live as well as large regional bank SunTrust.

AT&T will begin loading the Firethorn client onto its handsets later this year, but the client is available for download over existing devices today, after the customers sign up for the service on their respective banks’ online banking portals.

Qualcomm’s purchase of Firethorn is a definite sign that mobile banking will be hot technology in the future. Qualcomm has always been a shrewd investor in new technologies, latching on to key mobile application and radio access technology as well as key patents early, much to the chagrin of many of its competitors. Qualcomm also could help spur mobile banking forward by incorporating Firethorn’s key client and security technology into its CDMA and wideband CDMA chipsets. Qualcomm has taken the approach in the past, incorporating GPS and its BREW software into basic chipset builds. Its GPS efforts are largely responsible for the wide availability of location-based services on CDMA phones today.

“Qualcomm is a very heavy hitter in the telecommunications world, with deep ties to the development of chipsets, mobile devices, standards and protocols,” Aite Group senior analyst Nick Holland said in a research note today. “The acquisition of Firethorn could accelerate deployment of their mobile banking and payments platform internationally.”

Holland added he expects Qualcomm’s move to offer legitimacy to the nascent industry. Other financial institutions have already announced their intent to get into the mobile bank space. “Expect something of a goldrush of mobile banking vendors being snapped up over the next few months, as Qualcomm’s acquisition telegraphs the transition from vaporware to legitimate business opportunity,” he said.

Firethorn will keep its headquarters in Atlanta, and company CEO Tripp Rackley will continue to head the unit, reporting to Qualcomm executive vice president Len Lauer. Qualcomm said it expects the deal to close in 30 days.