Instruments provider Life Technologies has acquired sequencing firm Ion Torrent of Guilford, Connecticut and S. San Francisco in a deal worth $725 million—a price tag that has left some industry observers reeling. In August, the Carlsbad, California–based Life paid $375 million upfront, with potential for an additional $350 million in milestones. The prize is Ion Torrent's Personal Genome Machine, a system that uses semiconductors rather than optics for sequencing DNA. According to Life, the first-generation system, due in Q4 2010, will cost $50,000, and its potential scalability suggests it could tackle entire genomes relatively soon. This machine cannot readily compete with the multi-gigabase output of San Diego-based Illumina's HiSeq2000 or Life's SOLiD 4—and Ion Torrent founder and CEO Jonathan Rothberg stressed at a recent meeting that it is not intended to do so. “In the near term, there could be some virology and pathogen applications, and longer term there could be some clinical diagnostic applications,” says Doug Schenkel, managing director and senior research analyst at Cowen & Company, New York. However, Life's investment considerably exceeds their target market—estimated at $200 million—suggesting a focus on long term opportunities. Success is contingent upon both expansion of the sequencing market and the impact of other powerful contenders: newcomers Pacific Biosciences and Complete Genomics have recently filed initial public offerings, and market leader Illumina is unlikely to rest on its laurels.