The GPS chip supplier faces: a declining market for personal navigation devices; increasingly tougher competition for design-wins in mobile handsets; and on-going legal entanglements with Global Locate, one of SiRF's competitors which Broadcom bought in 2007.

A merger with CSR, a leading Bluetooth chip vendor based in the U.K., is the best hope for SiRF's survival in a mobile handset market demanding the best multi-radio connectivity solution. The CSR's deal to acquire SiRF awaits approvals of shareholders at respective companies on June 25th.

Still, a huge challenge ahead of is the integration of the two geographically distant teams -- SiRF in San Jose and CSR in Cambridge, the U.K. The two companies' first jointly-developed multi-radio silicon won't be launched until 2011, another potential problem with the race for integrating multiple radios in cell phones already in full swing.

Further, the last thing SiRF needed was the recent U.S. Government Accountability Office's report on GPS. In the report, GAO warned that the Air Force's delayed acquisition of new GPS satellites may lead to GPS signal degradation starting in 2010, as old satellites begin to fail. SiRF and industry analysts don't agree with the GAO's assessment, but they worry that the report may trigger a panic on the consumer GPS market.

Against this backdrop, SiRF unveiled last week a new multifunction location processor designed for high-volume, GPS-enabled consumer products.

Called SiRFatlasIV, the new processor -- featuring a GPS baseband, touch-screen controller and multi-layer cell flash controller -- enables ODMs and OEMs to develop a location-centric multimedia system "at less than $50," according to SiRF.

Kanwar Chadha, founder and vice president of marketing for SiRF, said that SiRFatlasIV, using a core of the company's high-end SiRFprima multifunction location processor, is "optimized for the entry-level location-centric systems."

With the new processor, Chadha is hoping for an uptick of a market segment for "embedded, multi-function systems whose focus is location." It's a category for new digital consumer products that "are neither as fully programmable as PC nor as single-function devices as personal navigation devices," according to Chadha.

Such a market, however, is as elusive as its production definition.