Qualcomm, the leading manufacturer of mobile phone chipsets, has agreed to take over British chipmaker CSR (Cambridge Silicon Radio) for $2.5 billion or £1.56 billion. This acquisition will give the US-based chipmaker Qualcomm an opportunity to make it big in the Internet of Things (IoT) and automobile infotainment markets, which according to experts will undergo substantial growth in the coming months.
In a statement issued recently, Qualcomm said that this acquisition will allow it to gain access to all customers, channels and products CSR currently has in the automotive infotainment and IoT markets. The American chip maker further said that on August 27, CSR has accepted a cash offer of 900 pence/share, which constitutes around 57% of the premium on the share price of the British firm. Reports are suggesting that the deal between Qualcomm and CSR will close by next year summer.
Qualcomm is not the only company to bid for acquiring CSR. The month of August also saw CSR rejecting Microchip Technology’s takeover bid; the offer amount, however, has not been disclosed by any of the two parties. Here, it must be mentioned that Microchip technology is also an American chip manufacturing firm.
The deal between Qualcomm and CSR is another strong indicator of the fact that the American chipmaker is currently working to make sure that its chips become invincible not only when it comes to tablets and smartphones, but also have strong presence in cars, connected home appliances and wearables.
According to Lee Simpson, an analyst at Jefferies, Qualcomm has taken the “buying” instead of “making” route; Simpson, however, added that the acquisition of CSR definitely fits in with the strategic moves Qualcomm has taken recently.
CSR works to come up with innovative connective features that get used in Apple’s Beats headphones and other portable audio speakers. It is the first company to launch wireless Bluetooth technology. The popularity of this technology is rising rapidly and consistently, and you will come across a number of cars, home appliances and wearables that use this technology.
Through this acquisition, Qualcomm is looking to make its position stronger in markets that it feels have high potential of growth. This is something it has done in the past also.
Before bidding for CSR, Qualcomm acquired Wilocity in the month of July. This allowed the company to integrate 60 GHz Wi-Fi technology more easily into mobile platforms.
The latest acquisition will also open several doors for Qualcomm; only time will tell what exactly they would be.