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NEW YORK (Reuters) - Qualcomm Inc (Nasdaq:QCOM - news) said on Thursday it would buy wireless broadband technology firm Flarion Technologies to expand its own wireless technology portfolio in a cash and stock deal worth $600 million.

It could pay an another $205 million if the companies reach certain milestones within eight years of the deal closing.

Shares of Qualcomm, a supplier of wireless chips and technology licenses, rose as much as 3 percent with one analyst saying its purchase of the high-profile private firm could help Qualcomm dominate the market for future high-speed wireless technologies. ``Both companies are doing well on this deal,`` Deutsche Bank analyst Brian Modoff said. ``Flarion investors are getting a good exit strategy and Qualcomm is continuing to have a strong patent portfolio.``

The combination could be bad news for developers of future versions of WiMax, an emerging high-speed wireless technology which includes chip giant Intel Corp. (Nasdaq:INTC - news) among its most prominent backers, behind, Modoff said.

Developers of mobile versions of WiMax could have a ``difficult time designing their systems for mobility without infringing Qualcomm patents`` as a result of the deal, he said.

Qualcomm executives told analysts on a conference call that they believe the combined company`s patents apply to WiMax.

Bedminster, New Jersey-based Flarion was spun out of the development arm of Lucent Technologies Inc. (NYSE:LU - news), which no longer has an ownership stake in Flarion.

Many operators around the world have tested Flarion`s gear in their search for high-speed wireless technology but it has had little commercial success so far as most operators are currently building networks based on Qualcomm technology.

Qualcomm dominates the market for CDMA, the most popular cellphone standard in the United States. It also sells licenses and chips for W-CDMA, a high-speed wireless standard that is emerging in Europe and other parts of the world.

San Diego, California-based Qualcomm said it expects the deal to dilute its fiscal 2006 earnings per share by about 3 cents. Upon closing the deal it expects $10 million in one-time charges related to in-process research and development.

It plans to issue $267 million of stock and assume existing Flarion options and warrants valued at about $128 million, and pay about $205 million in cash, net of Flarion`s projected cash balance at the close of the deal.

Within eight years of the close Qualcomm plans to issue another $35 million of stock and pay another $170 million in cash, depending on certain milestones, it said.

Qualcomm expects to close the deal, which is subject to regulatory approval, later this year. Flarion was advised by Evercore Partners and Qualcomm was advised by Morgan Stanley.

Qualcomm shares were up $1.12 at $40.33 in morning trade on Nasdaq after hitting $40.60 earlier in the session. Intel shares were down 42 cents, or 1.6 percent, at $26.46.