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Google Purchases Startup Linked to Apple's P.A. Semi Chip Division [Updated]

Wednesday April 21, 2010 6:14 am PDT by Eric Slivka

In another interesting twist in the relationship between Google and Apple, peHUB reports that Google has purchased startup firm Agnilux, a San Jose company founded by a number of defectors from P.A. Semi, the chip company Apple acquired in early 2008 to provide expertise in ARM chip designs for products such as the iPad and iPhone. A number of prominent P.A. Semi employees were previously known to have left Apple to form Agnilux soon after their previous company was acquired.

Many of P.A. Semi's chip developers stuck with Apple, but others -- including some system-level folks -- launched a stealth startup called Agnilux. They also personally funded Agnilux with proceeds from the Apple acquisition.

Now, peHUB has learned that Google recently acquired Agnilux, which previously held strategic investment talks with companies like Cisco, Microsoft and Texas Instruments. We have not yet been able to confirm pricing terms, although assume it must have been a big deal to convince the Agnilux founders to shun the strategic investment -- or traditional venture capital -- routes so soon after founding.

According to a New York Times article from early February, sources have claimed that some of the P.A. Semi employees left Apple due to unattractive pricing of stock grants they received as part of the acquisition. And as far as what Agnilux has been working on, the company has been silent on the matter. A separate report from The New York Times, however, cites an Agnilux employee who claimed that the company is developing "some kind of server".

It is unclear whether Google's acquisition of Agnilux is yet another direct threat to Apple's position in the mobile market, or whether reports that Agnilux is focused on server technology mean that Google's interest in the company lies elsewhere and its connection to Apple and P.A. Semi is merely tangential.

Update: The New York Times reports that Google's purchase of Agnilux is not for hardware but to assist in porting Google software platforms to other devices.

A person familiar with the deal said Google acquired the firm not for silicon expertise or to build actual hardware, but for help with porting Google platforms like its Chrome and Android operating systems onto other devices - like tablets, or possibly even television set-top boxes. "These are systems guys focusing on hardware-software integration," this person said. "It's not chip design. It's getting software platforms to work on different kinds of hardware with lots of obscure back-end technologies."

In particular, another source indicates that the Agnilux team can help Google with power regulation that would allow its software platforms to make better use of battery life on tablet devices.