Amazon is in “advanced negotiations” to buy Texas Instruments’ mobile chip business, according to Israeli newspaper Calcalist, with the price expected to be in the billions of dollars range. If the deal goes ahead Amazon would take a step close to rivals Apple and Samsung by gaining the ability to design and manufacture its own mobile chips.
At the time of writing, Amazon and Texas Instruments had not responded to a request for comment. We’ll update this story with any response.
TI chips are used in various devices including Amazon’s Kindle Fire tablet. Calcalist also notes that TI is a supplier to Amazon’s rival Barnes & Noble’s Nook e-reader. The paper previously reported TI was considering exiting the mobile chips business because of increased focus on integrated technology solutions, and also Intel’s entrance into the market. TI has lost out to rival chipmakers such as Qualcomm when it comes to gaining significant mobile market share (Qualcomm took 48 percent market share in the first half of this year, according to Strategy Analytics).
Calcalist speculates that the rumoured Apple iPad mini could be the catalyst for Amazon to acquire TI. Amazon’s strategy to compete with the iPad has been to launch cheaper, lower-end tablets sold at cost price – but if Apple launches a cheaper iPad, that will erode the appeal of Amazon’s Kindle devices.
However Gartner analyst Carolina Milanesi told Reuters she doubted whether Amazon wants to “become that intimately involved with hardware”.
A TI spokeswoman told Calcalist the company does not comment on rumour and speculation.
Update: A TI spokesperson provided the following complete statement
As part of a long-standing company policy, we don’t comment on market rumors and speculation.
As communicated in a recent investor event, the Smartphone market has become a less attractive long-term opportunity for TI’s OMAP and Connectivity products, and we are re-profiling our investment accordingly.
While the opportunity in Smartphone is less attractive, we are fully committed to OMAP and Connectivity products – and we see a great opportunity for both OMAP & Connectivity in a broader set of embedded applications and we are accelerating our push into these new markets with product roadmaps optimized for automotive, industrial and other consumer applications.
Examples of these embedded applications where OMAP & Connectivity are a perfect fit are:
o OMAP: automotive (rich visual displays for infotainment systems and rear-seat displays), industrial (fluid, responsive touchscreens for human-machine interfaces and home automation), enterprise communications (high-definition video experiences for video IP phones and video conferencing) and robotics (cutting-edge vision analytics technology for intelligent home and industrial robots).
o Connectivity: in-building (connected smart meters, intelligent appliances that automatically place a service call, electronic shelf labels at retail where pricing can be updated instantly across all stores), portable (smart bandages that sense body temperature, blood glucose meter, health and fitness monitor), automotive (tire pressure sensors, wireless rear view cameras, wireless seat adjustment systems to eliminate cost and weight)