Arms Race: Amazon Aims to Acquire Mobile Chip Business from Texas Instruments
Supposing Amazon pulls off what's expected be a deal worth billions of dollars, it would be a game-changing acquisition that would immediately situate the e-tailer as a direct competitor to Apple and Samsung, as all three would then be designing their own processors.
The move makes sense for both sides. TI has already indicated that it wants to sell off its mobile processors division and focus on a broader market, and since Amazon is already a major customer, the upside on its end if pretty obvious. In the second quarter of 2012, TI posted revenue of $342 million in its mobile processor business, compared with $558 million a year prior. The problem TI faces is intense competition in the mobile processor market from players like Nvidia (Tegra) and Samsung (Exynos).
Amazon's Kindle Fire HD 8.9" is powered by a Texas Instruments OMAP4470 processor.
"With the trend towards more vertical integration, led by Apple, speculation that Amazon is interested in TI's chipset arm is unsurprising," Ben Wood, head of research at CSS Insight, told Reuters.
Not only would this move benefit Amazon's tablet business, but it would also align nicely with the company's rumored plans to enter the smartphone market, of which TI's OMAP processors are also suitable for.