The purchase announced today of London-based Grey Cell buys TDK's System Group expertise in GSM, LAN, modem and combination cards and paves the way for an ambitious strategy to become the world number one in mobile communications. TDK's acquisition for an undisclosed sum of privately held Grey Cell will also give the Japanese giant a European design centre for PC Card and associated mobile communications products, the firm said. "With our announcement today we are completing our worldwide design plans," said David Heppe, TDK's newly appointed managing director for the Systems Group in Europe. "We didn't have the complete feature set for modem with GSM, and we really needed a European design centre to design products for the European market. Our target is to be number one in Europe for mobile communications. It's not nearly fun if you're not number one." Heppe added that the buy would also give TDK access to the European retail channel; TDK has been selling exclusively through corporate resellers for the last two years. Also, the deal would provide more insight into developing multifunction cards. In terms of GSM, Heppe said that TDK's contacts gleaned from manufacturing GSM handset components would be a good match for Grey Cell's GSM card nous. Another intriguing incentive for TDK was Grey Cell's software engineering skills set. The firm will next month launch SoftMobile, a GSM product that relies on the host PC for processing. SoftMobile will be available for Windows 95, NT and later CE. Nick Hunn, product development manager for TDK-Grey Cell, said that "a new type of peripheral that is half hardware and half software with a cable is emerging". Hunn added that the emergence of Windows 98 in association with the penetration of fast interconnect standards such as USB and IEEE.1394 (FireWire) will help develop software-based communications. The development will mean much cheaper communications products long-term, Hunn said. Hunn said that Grey Cell has also been developing SMS and PhoneBook apps so that users could, for example, download contact details to mobile phones. David Chao, who founded Grey Cell seven years ago from a flat in Harrow, said that the company had decided to sell out in order to fund global expansion. Despite its minnow status, Grey Cell has chalked up a string of firsts including the first fax-modem/Ethernet combination PC Card, the first fibre optic PC Card, and the first Ethernet 10Base2/10BaseT combination card. The firm had about £2 million in revenues for its financial year ending July 1996 and employs around 20 staff.