Announced late last week, CSR Limited has officially been acquired by Qualcomm, Inc. (NASDAQ: QCOM) and the deal was worth 2.4 billion dollars. The chipmaker has now shifted its focus to the Internet of Things.
Qualcomm had made an announcement last October about acquiring CSR, a CSR Plc. (NASDAQ: CSRE) owned subsidiary that is operational in the UK. However, owing to regulatory delays, the transaction could not be closed.
Qualcomm was reported saying that with the acquisition, two segments of the company, namely, the automotive and Internet of Everything (IoE) is likely to grow in a big way. These are priority development areas for the company. A leading position is held by CSR in the current market with respect to Bluetooth devices. The company undertakes chip manufacturing and these are utilized in various IoE products as well as the automotive industry.
With the recent acquisition, Qualcomm will be able to establish its name in the United Kingdom. The company will also be able to augment a selection of latest products, increasing the number of customers in IoE, which will help in its growth.
The complementary strengths of CSR, namely in audio technologies, connectivity and chip-enabled systems will help in strengthening the position of Qualcomm Technologies in the automotive and IoE segments. It will contribute towards a huge and greatly advanced portfolio, reported Steve Mollenkopf, CEO, Qualcomm.
Aiming towards more chips
Qualcomm’s acquisition will help in adding more chips to its product portfolio, beyond Bluetooth. It means the coming in of wireless processors and LTE modems. The position of the chip manufacturer in the Internet of Things (IoT) market will also improve (thermostats, refrigerators, televisions and so on) as almost all devices have a wireless connection with the Internet, that is managed through smartphones.
Even though, the acquisition of CSR has opened more doors for development for Qualcomm, it paid more than 50 percent premium for acquiring the company. It is a lot compared to the mere 10 percent premium that Intel Corporation (NASDAQ: INTC) paid for acquiring Altera Corporation (NASDAQ: ALTR).
Also, the focus of Qualcomm is more on the business of manufacturing chips. However, it is still struggling in segments such as cellular radio. So these kinds of profligate measures can prove risky during crisis.
Qualcomm is a team of scientists, business strategists and engineers from different countries, speaking several different languages. The company has diverse cultures and unique perspectives and focuses on one single goal-inventing mobile technology innovations.