According to a report by Calcalist, Amazon may be in the process of buying the smartphone and tablet chip business of Texas Instruments. TI recently announced that it will be shutting down its operations in the smartphone and tablet space, and focus on its core strengths – embedded device platforms.
Amazon is one of the perfect buyers for that business. By having its own chip manufacturing operation, it can have greater control over the chips running its Kindle devices. Given the rumors that it may enter the smartphone space and the fact that its Kindle device sales are growing significantly, this seems like a logical move.
Amazon’s competitors like Barnes & Noble use TI’s chips, so such an acquisition could also help Amazon gain a competitive advantage and make things tough for its rivals.
TI’s chip business could be worth billions of dollars, and Amazon could also be willing to pay a huge premium, given the high strategic value to it. Google, Apple and Samsung are all moving towards an operational model wherein they are trying to increase their control over the components that make their devices.
Texas Instruments, known for its OMAP series of SoC, that have powered most of the 2011 range of Motorola devices and the Galaxy Nexus, have decided that they will be reducing their focus on the mobile market. The company will instead focus on making embedded chips for car makers and other such markets.
The OMAP platform from TI is the most ‘open’ SoC out there, and is one of the favorite SoCs of Android developers, thanks to its open-source drivers. The problem, however, for TI has been that they have consistently failed to reach the deadlines for their products, and have been consistently outpaced by their competitors in bringing newer generation SoCs to the market first. This year, the OMAP SoC has been found powering only one device – the recently announced Kindle Fire HD.
“We believe that opportunity is less attractive as we go forward,” Greg Delagi, senior vice president for embedded processing, said during a webcast of the meeting.
TI was widely expected to be the first to the market to launch its OMAP 5 SoC, based on the Cortex-A15 architecture, by the end of this year, but after today’s announcement from the company, the chances of that happening are close to nil.
Via – Reuters