Atheros Announces Industry’s First Bluetooth® 2.1 + EDR Solution to Deliver Enhanced Wireless Connectivity in PCs

Atheros Complements its Best-in-Class WLAN Technology with the Industry’s Smallest and Lowest-Cost Bluetooth® Design for Laptops and Desktops

SANTA CLARA, Calif., Jan. 29, 2007 — Atheros Communications, Inc. (NASDAQ: ATHR), a leading developer of advanced wireless solutions, today announced the Atheros AR3011, the first member of the company’s ROCm®,  Radio-on-Chip for Mobile, family of Bluetooth® solutions. It is the industry’s first Bluetooth® 2.1 + Enhanced Data Rate (EDR) solution for PCs[1]. Atheros’ AR3011 is targeted to the PC OEM market in which the company has deep technical experience and strong customer relationships. The single-chip solution is the smallest and enables the lowest-cost Bluetooth® design to date, intended to drive adoption of Bluetooth® technology in laptops and desktops. Atheros’ Bluetooth® solution for PCs supports wireless LAN (WLAN) co-existence and simultaneous usage of multiple Bluetooth® -based devices.

The growing number of wireless applications has increased demand for Bluetooth® technology in PCs. Last year, Bluetooth® penetration of the laptop market was estimated at 31 percent. By 2011, it is expected to grow to 74 percent[2]. The desktop PC market is also expected to increase its adoption of Bluetooth® technology as the cost to implement the technology declines. More than ever, consumers want Bluetooth® to connect wireless mice, keyboards, MP3 players, headsets and mobile phones to laptop and desktop PCs. 

Atheros has a leading position in the PC OEM market with its high-performance 802.11n, 802.11a/g and 802.11g WLAN chipsets. The company is now leveraging its wireless expertise and strong PC OEM relationships to deliver the first Bluetooth® solution optimized for PC platforms. Atheros’ world-class integration enables low systems costs that will drive adoption of Bluetooth® technology into an array of PC platforms, ranging from enterprise-class laptops to budget desktops.

Atheros will offer the AR3011 in combination with the company’s highly-integrated wireless LAN products. These solutions will provide superior WLAN and Bluetooth® capabilities in low-cost and compact half mini PCI Express card designs. The efficient combination of Atheros’ WLAN and Bluetooth® technologies will enable PC OEM customers to deliver the complete wireless complement to wired Ethernet and USB connectivity, universal to all personal computers.

The co-existence of WLAN and Bluetooth® is becoming so prevalent in wireless-enabled devices that industry activities have recently begun with the objective of implementing wireless LAN as a part of the high-speed physical layer in Bluetooth® technology.

Bluetooth® Optimized for PCs

Today, Bluetooth® PC solutions are based on re-purposed handset products with external parallel Flash memory, which drive the need for BGA packages and higher cost modules. Rather than re-purposing a Bluetooth® solution used in mobile products, Atheros is the only company to deliver a Bluetooth® chip uniquely designed for the PC market. Atheros has architected the AR3011 to achieve the highest level of integration. The single-chip AR3011 is implemented in standard digital .13 micron CMOS and a low-cost 6x6 mm QFN package. Atheros eliminated the need for external Flash by integrating SRAM. To reduce the number of external RF components, Atheros designed the AR3011 radio to eliminate the need for Balun and matching network. The AR3011 also offers 2- , 3- and 4-wire TDM co-existence support to provide optimal co-existence with co-located WLAN.

The result of this industry-leading integration is a dramatically lower bill-of-materials (BOM) cost. The AR3011 requires only six external passive components, more than a 60-percent reduction in component count, resulting in significant cost savings versus competitive solutions. The AR3011 is also optimized for low power, featuring a unique radio design and use of innovative system and software partitioning techniques.

The AR3011 provides the complete software solution for PC platforms. It supports Microsoft Windows® Vista® and offers a rich set of additional Bluetooth® profiles and software for easy integration into new laptops and desktop PCs.

“To date, the Bluetooth® market for PC OEMs has been underserved” said Sam Endy, vice president and general manager of Mobile Wireless Business Unit for Atheros. “Our single-chip solution is optimized for the PC platform, offering the lowest BOM cost and smallest form factor in the industry while also supporting wireless LAN co-existence. Atheros’ Bluetooth® technology builds on the company’s expertise in the mobile and embedded market to deliver the most complete, wireless networking experience.”     

The Bluetooth® 2.1 + EDR specification, which is expected to be ratified soon, delivers an array of connectivity enhancements which focus on providing increased security and power savings, and enhanced usability.

Bluetooth® 2.1 + EDR enhancements

• Secure Simple Pairing
  - Improves ease of pairing of Bluetooth® devices while implementing strong security
• Encryption Pause and Resume
  - Increases security in the link by ensuring that no user data is transmitted without
  encryption and enables periodic update of the keys
• Extended Inquiry Response
  - Provides better filtering of devices before connection
• Sniff Subrating
  - Reduces power consumption when devices are in the sniff, low-power mode,
  increasing battery-life

The AR3011, the newest member of Atheros’ ROCm® family of embedded mobile technologies, features a USB 2.0 device interface, dual 1.2V voltage regulators, integrated 32-bit CPU, and integrated RAM.  Atheros’ patent-pending innovations, including VCO fine frequency control and a hybrid offset zero IF architecture, contribute to the AR3011’s high performance, manufacturability and competitive cost.

Product Availability

The AR3011 silicon will be available in the first quarter. For more information on this product please visit www.atheros.com/pt/AR3011.htm.

About Atheros Communications, Inc.

Atheros Communications is a leading developer of semiconductor system solutions for wireless communications products. Atheros combines its wireless systems expertise with high-performance radio frequency (RF), mixed signal and digital semiconductor design skills to provide highly integrated chipsets that are manufacturable on low-cost, standard complementary metal-oxide semiconductor (CMOS) processes. Atheros technology is being used by a broad base of leading customers, including personal computer, networking equipment and handset manufacturers. For more information, visit www.atheros.com or send email to info@atheros.com. 

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Atheros, the Atheros logo and ROCm are trademarks of Atheros Communications, Inc. All other trademarks mentioned in this document are the sole property of their respective owners.

NOTE ON FORWARD-LOOKING STATEMENTS:

Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the features, performance, competitiveness and benefits of Atheros' AR3011 Bluetooth® solution, the anticipated increase in the adoption of Bluetooth® technology in laptop and desktop PCs, and the anticipated timing of availability of AR3011 silicon, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, difficulties in development and manufacture of new products and upgraded products, unforeseen problems in the performance of the products upon broad deployment, general economic conditions, the effects of competition and technological change, and other risks detailed in Atheros' Annual Report on Form 10-K for the year ended December 31, 2005, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 as filed with the Securities and Exchange Commission, and in other reports filed with the SEC by Atheros from time to time. These forward-looking statements speak only as of the date hereof. Atheros disclaims any obligation to update these forward-looking statements. 

Although we believe that the forward-looking statistical information quoted from the IMS Research report is reliable, we have not independently verified this data. IMS Research generally indicates that it has obtained its information from sources believed to be reliable, but does not guarantee the accuracy and completeness of the information.

The Bluetooth® word mark and logos are owned by the Bluetooth SIG, Inc. and any use of such marks by Atheros is under license. Other trademarks and trade names are those of their respective owners.