Apple loses bid for display chip maker Renesas SP Drivers to Synaptics - report

Posted:
in iPhone edited May 2014
Talks between Apple and Japanese company Renesas over a potential $479 million transaction -- one that would have given Apple a controlling interest in the sole supplier of display driver chips for the iPhone -- have broken down, a Tuesday report claims.




The lack of progress in negotiations with Apple prompted Renesas to turn its focus to Synaptics, according to Reuters. Synaptics develops a number of interface technologies -- most famously controllers for laptop touchpads -- and has itself long been an Apple supplier.

Rumors of Apple's interest in Renesas SP Drivers first surfaced last month, at which point it was believed that Apple was looking to acquire 55 percent of the company from Renesas and a further 25 percent from Sharp. Taiwanese semiconductor manufacturer Powerchip is the remaining owner.

Renesas SP Drivers is Apple's only source of LCD chips for the iPhone, components which are important in determining the display's overall clarity and quality. The Cupertino, Calif. company's bid was though to be part of a broader strategy to assert more control over its supply chain.

Apple has made a number of such deals in recent years, most recently a $578 million agreement to jointly operate a new Arizona sapphire plant. The company also owns around 10 percent of GPU designer Imagination Technologies and has invested nearly $1 billion to acquire several semiconductor firms that are thought to have contributed directly to Apple's new in-house processor designs.
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Comments

  • Reply 1 of 24
    melgrossmelgross Posts: 31,381member
    I really don't understand how this happens. Apple does play hardball in these negotiations. But really, Synaptics? Apple could have bought them as well. I don't know why they haven't. So how much are they arguing about? Does it really matter if it's another $50 million or $100 million, or so.

    Just finish the deal, and move on.
  • Reply 2 of 24
    bobjohnsonbobjohnson Posts: 154member
    Quote:

    Originally Posted by melgross View Post



    I really don't understand how this happens. Apple does play hardball in these negotiations. But really, Synaptics? Apple could have bought them as well. I don't know why they haven't. So how much are they arguing about? Does it really matter if it's another $50 million or $100 million, or so.



    Just finish the deal, and move on.

     

    $50 million here, $100 million there. Pretty soon you're talking about real money!

  • Reply 3 of 24
    rogifanrogifan Posts: 10,669member
    melgross wrote: »
    I really don't understand how this happens. Apple does play hardball in these negotiations. But really, Synaptics? Apple could have bought them as well. I don't know why they haven't. So how much are they arguing about? Does it really matter if it's another $50 million or $100 million, or so.

    Just finish the deal, and move on.
    Got to save their money for the all important Beats! ;)
  • Reply 4 of 24
    slurpyslurpy Posts: 5,107member
    Quote:

    Originally Posted by Rogifan View Post





    Got to save their money for the all important Beats! image

     

    Or, maybe they decided on 2nd thought they dont want Renesas? There could be a million reasons why. Its very unlikely the reasons were purely financial. 

  • Reply 5 of 24
    island hermitisland hermit Posts: 6,217member
    Quote:

    Originally Posted by melgross View Post



    I really don't understand how this happens. Apple does play hardball in these negotiations. But really, Synaptics? Apple could have bought them as well. I don't know why they haven't. So how much are they arguing about? Does it really matter if it's another $50 million or $100 million, or so.



    Just finish the deal, and move on.

     

    Another $100-200 million is chump change to Apple. I also don't get the holdup, especially when it's to a "relatively" small company like Synaptics..

     

    Well, maybe Apple will have to buy Synaptics now.

  • Reply 6 of 24
    pazuzupazuzu Posts: 1,728member
    rogifan wrote: »
    Got to save their money for the all important Beats! ;)

    LOLOLOL save it for watch glass and thermostat controllers too. :smokey:
  • Reply 7 of 24
    apple ][apple ][ Posts: 8,360member
    Quote:

    Originally Posted by BobJohnson View Post

     

     

    $50 million here, $100 million there. Pretty soon you're talking about real money!


    Who gives a crap about 50 million or 100 million when they were willing to spend 3.2 Billion on another rumored deal that has been a lot in the news lately.

  • Reply 8 of 24
    island hermitisland hermit Posts: 6,217member
    Quote:

    Originally Posted by Apple ][ View Post

     

    Who gives a crap about 50 million or 100 million when they were willing to spend 3.2 Billion on another rumored deal that has been a lot in the news lately.


     

    Motorola?

  • Reply 9 of 24
    apple ][apple ][ Posts: 8,360member

    The real reason why negotiations broke down was because the CEO of Renesas posted a video to youtube proclaiming himself to be a Japanese multi millionaire display chip maker.

     

    In the video, the CEO can be seen smoking a blunt and stating "Ya'll better recognize. I'm a bad Japanese mofo, and all those other display chip makers aint nothing but wack niggas. I am the true nigga, and we about to be bought up by Apple! You know what I'm sayin'? Bitches gonna go wild for this."

     

    An attempt had been made to reach out to Apple for comment, but there has been no response as of yet.

  • Reply 10 of 24
    bobjohnsonbobjohnson Posts: 154member
    Quote:

    Originally Posted by Apple ][ View Post

     

    Who gives a crap about 50 million or 100 million when they were willing to spend 3.2 Billion on another rumored deal that has been a lot in the news lately.


     

    Who gives a crap about $400 for a pair of headphones when you're willing to spend $30,000 on a car? It's all a matter of value. 

  • Reply 11 of 24
    apple ][apple ][ Posts: 8,360member
    Quote:

    Originally Posted by island hermit View Post

     

     

    Motorola?


     

    Didn't Google pay 12.5 Billion for them?

     

    3.2 Billion seems to be the same exact amount that Google paid for Nest. 3.2 Billion seems to be a popular figure, widely used by different corporations.

  • Reply 12 of 24
    melgrossmelgross Posts: 31,381member
    rogifan wrote: »
    Got to save their money for the all important Beats! ;)

    Well, I've been reading some interesting stuff about that as well. It seems that Beats is incorporated in Ireland, where, as we know, Apple also has a financial stake. The financial analysts believe that Apple can use their foreign cash to buy them. Doing that will make the deal worth $2 billion rather than $3.2 billion, because of the tax savings. This makes the deal look a lot better, assuming that Dr. Dre's ranting hasn't killed the deal already.

    And don't forget that the other guy in the deal, I forget how to spell his name right now, owns a good chunk of Interscope. So there are a number of reasons why this deal could be a good one, despite the quick knee jerk reactions against it.

    But when it comes to smaller deals, I do understand that Apple doesn't want to give these companies any ideas as to their overcharging Apple if they do give in on pricing. But really, if this is important enough for them to want, because of a major strategic standpoint, then they should just go ahead. Apple has lost deals to other companies before. I'd rather see them buy these companies for a bit more money, then waste many tens of billions on stock buybacks.
  • Reply 13 of 24
    melgrossmelgross Posts: 31,381member
    slurpy wrote: »
    Or, maybe they decided on 2nd thought they dont want Renesas? There could be a million reasons why. Its very unlikely the reasons were purely financial. 

    I don't believe that. If negotiations have gone this far, it means that Apple has done their due diligence of the company. Look at the trouble Hp got into because they didn't do a responsible due diligence of Autonomy. But Apple is known to be cheap. It could be that they just don't feel that the company, from an accounting viewpoint, is worth another $50 million. That would be foolish, if they're looking to the future, and believe they need to lock this company's IP up.
  • Reply 14 of 24
    island hermitisland hermit Posts: 6,217member
    Quote:

    Originally Posted by Apple ][ View Post

     

     

    Didn't Google pay 12.5 Billion for them?

     

    3.2 Billion seems to be the same exact amount that Google paid for Nest. 3.2 Billion seems to be a popular figure, widely used by different corporations.


     

    Lenovo got Motorola's corpse for $2.91 billion.

  • Reply 15 of 24
    apple ][apple ][ Posts: 8,360member
    Quote:

    Originally Posted by island hermit View Post

     

     

    Lenovo got Motorola's corpse for $2.91 billion.


    Yeah, I do remember reading that Google had sold them for quite a loss.

     

    It seems that companies like Google and FB have no problems with blowing money left and right on just about anything.

  • Reply 16 of 24
    gatorguygatorguy Posts: 20,033member
    melgross wrote: »
    Well, I've been reading some interesting stuff about that as well. It seems that Beats is incorporated in Ireland, where, as we know, Apple also has a financial stake. The financial analysts believe that Apple can use their foreign cash to buy them. Doing that will make the deal worth $2 billion rather than $3.2 billion, because of the tax savings. This makes the deal look a lot better, assuming that Dr. Dre's ranting hasn't killed the deal already
    http://economic-incentives.blogspot.com/2014/05/apple-beats-google-and-how-it-is-still.html
    It looks questionable whether Beats can claim Irish residency for tax purposes in selling their company to Apple. Perhaps that's a part of the holdup too.
  • Reply 17 of 24
    bobjohnsonbobjohnson Posts: 154member
    Quote:
    Originally Posted by Apple ][ View Post

     

    Yeah, I do remember reading that Google had sold them for quite a loss.

     

    It seems that companies like Google and FB have no problems with blowing money left and right on just about anything.


     

    Only a naive analysis of the figures would conclude that Google sold Motorola at a substantial loss. They bought Motorola for $12.5 billion ($9.5 billion when excluding Motorola's cash) and then moved the STB division for $2.4 billion, bringing the effective acquisition cost down to $7.1 billion. Pull out the $2.9 billion for the handset hardware business from Lenovo and you end up with a $5.8 billion deal for Motorola's large, foundational patent portfolio and its advanced research division, which was not included in the Lenovo sale. Good deal, I say. 

  • Reply 18 of 24
    rob53rob53 Posts: 1,988member
    Or maybe Reuters is just making everything up. Why would anyone discuss anything with them anyway.
  • Reply 19 of 24
    island hermitisland hermit Posts: 6,217member
    Quote:

    Originally Posted by BobJohnson View Post

     

     

    Only a naive analysis of the figures would conclude that Google sold Motorola at a substantial loss. They bought Motorola for $12.5 billion ($9.5 billion when excluding Motorola's cash) and then moved the STB division for $2.4 billion, bringing the effective acquisition cost down to $7.1 billion. Pull out the $2.9 billion for the handset hardware business from Lenovo and you end up with a $5.8 billion deal for Motorola's large, foundational patent portfolio and its advanced research division, which was not included in the Lenovo sale. Good deal, I say. 


     

    What have I started. Forgive me for what I have done...  lol

  • Reply 20 of 24
    apple ][apple ][ Posts: 8,360member
    Quote:

    Originally Posted by BobJohnson View Post

     

    Only a naive analysis of the figures would conclude that Google sold Motorola at a substantial loss. They bought Motorola for $12.5 billion ($9.5 billion when excluding Motorola's cash) and then moved the STB division for $2.4 billion, bringing the effective acquisition cost down to $7.1 billion. Pull out the $2.9 billion for the handset hardware business from Lenovo and you end up with a $5.8 billion deal for Motorola's large, foundational patent portfolio and its advanced research division, which was not included in the Lenovo sale. Good deal, I say. 


     

    Most places that I've read about the sale do not come to the same rosy conclusion that you do.

     

    The deal marks one of the worst investments in Google's history. 

     

    http://www.cnet.com/news/google-sells-motorola-unit-to-lenovo-for-2-9b/

     

    Also, you didn't mention how motorola was operating at a loss, losing money each quarter that Google owned them. And the patents haven't been nearly as effective or profitable as Google had originally hoped for.

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