Qualcomm just made a statement of intent to the tech world by shelling out $47 bullion to buy NXP, a company that made its name by making semiconductors and chips used in wireless communication. Basically, Qualcomm is buying over a company that would complement Qualcomm’s core business.
Not many people know NXP. It’s original name was Philips Semiconductors, which is easily recognizable as it is linked to the famed electronics company of the same name.
NXP is not your average tech company making tons of money from a single location. The company, with headquarters in Holland, actually has offices in 35 countries around the world and employs about 45,000 people around the world
On the acquisition of NXP, the CEO of Qualcomm, Steve Mollenkopf, had this to say about the addition of the Dutch company to Qualcomm’s business:
With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry. The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale”
By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realize all the benefits of the intelligently connected world.”
For those who don’t know, Qualcomm is the company that makes the processors in some of the world’s leading smartphones. Sometimes, the status of your phone is determined by the kind of SoC present.
In other words what Intel is to computers, Qualcomm is to mobile devices.
Buying NXP is really a bold statement from Qualcomm. This is not so much about the company being bought as much as the price offered. Qualcomm is telling the world to sit up and take notice.
It is not inconceivable to assume that by integrating NXP unit with their operations, Qualcomm is seeking to completely dominate the telecoms and general tech business in ways that would only become apparent in the future.
Qualcomm can leverage this new acquisition to make significant in-roads in the business of smart cars, smart homes and the Internet of Things.
All these are very fresh new businesses that are only just becoming mainstream. For that reason it is like a rich, untapped virgin land with lots of resources.
The resources of course would be the demand for these gadgets in the future as the world key into their possibilities.
For instance, smart cars for now are just being used by a handful of people working in firms developing and making them. The few smart cars out in the public domain would in a few years from now become obsolete. This is how fast the industry is evolving with the advent of new and better ways to do things.
However, even at this nascent stage of the development of this new technologies, many tech firms are already making lots of money from making and supplying gadgets and accessories used in them
Basically, the future prospects for a company that controls the processors and chips in the smartphones, smart cars, IoT and smart homes of the future is limitless.
All I have to say about deals like this is that it doesn’t turn into a monopoly. I hate it when a single company controls everything about the production and pricing of products and services.
image credit: recode.com; sarsen.net; itworld.com; smarthomeenergy.co.uk