Qualcomm to buy iPhone Apple Pay chip manufacturer NXP for $47 billion

Posted:
in General Discussion
The deal, if approved by regulators, will put the one-time manufacturer of the motion co-processor and the current supplier of the Apple Pay near-field communication chipset under Qualcomm's control.




Besides just supplying the NFC and authentication chips for Apple Pay in the iPhone and Apple Watch, NXP supplies a number of solutions to automotive vendors for automotive "infotainment" displays, as well as a variety of wired and wireless networking chipsets.

Qualcomm currently supplies Apple with the cellular modem found in some models of iPhone 7, with Apple choosing to use an Intel-produced modem to diversify its supplier base, and not be reliant on any one supplier for key components.

A subsidiary of Qualcomm will tender an offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, representing a total enterprise value of approximately $47 billion.?The offer has been unanimously approved by the boards of directors on both companies.

The move appears to be a strategic one by Qualcomm to widen its customer base. According to Qualcomm's own financial data, Samsung and Apple are responsible for 50% of the company's consolidated revenue, and a manufacturer shift by either away from its products would have profound effects on earnings.

The combined company is expected to have annual revenues of more than $30 billion. Neither company is expecting any regulatory resistance to the deal.

Comments

  • Reply 1 of 13
    Qualcomm's market cap is $100 billion, and it has a huge franchise. Paying almost half that amount for NXP suggeste that Qualcomm expects mobile payments and other NFC applications to become a dominant technology in coming years.
    watto_cobra
  • Reply 2 of 13
    irelandireland Posts: 17,383member
    Speaking of large acquisitions...

    Apple would acquire Netflix for around $70B and it would complete Apple TV as a living room strategy and it would put the ATV ecosystem of apps front and centre as a result. $9.99 per month, $6.99 on Apple TV. I'd go for it if I were Apple.

    There's no one who understands new content like Netflix and no one who has their distribution channel. It's a lot of money but their new content lineup will become huge over the next 10 years. They'll own streaming. Snag them while you can, I say.

    I've made similar comments to this a few times, but let's face it this is what Apple and missing for their living room product. You don't a third party control the fate of your destiny. They need to own this.

    ~2020, Netflix rebrand: Apple TV
    edited October 2016
  • Reply 3 of 13
    rob53rob53 Posts: 1,902member
    ireland said:
    Speaking of large acquisitions...

    Apple would acquire Netflix for around $70B and it would complete Apple TV as a living room strategy and it would put the ATV ecosystem of apps front and centre as a result. $9.99 per month, $6.99 on Apple TV. I'd go for it if I were Apple.

    There's no one who understands new content like Netflix and no one who has their distribution channel. It's a lot of money but their new content lineup will become huge over the next 10 years. They'll own streaming. Snag them while you can, I say.

    I've made similar comments to this a few times, but let's face it this is what Apple and missing for their living room product. You don't a third party control the fate of your destiny. They need to own this.

    ~2020, Netflix rebrand: Apple TV
    It's interesting you talk about Netflix and new content in the same sentence. My wife watches Netflix to get to the old, subtitled movies, not new ones. Of course she's already watched all the new ones as well and is now bored with Netflix's selection. Apple TV needs access to broadcast TV before it wastes its money on buying something like Netflix. Netflix is already available on Apple TV so why buy it? Let the people pay for what they want. If Apple could buy one broadcasting company I'd like to see them buy Discovery Communications (https://en.wikipedia.org/wiki/Discovery_Communications). This isn't just the Discovery channel anymore, they're huge, making up the majority of the channels offered by cable and satellite companies. Netflix is like Redbox, they just collect and rent old movies.
    ronncyberzombie
  • Reply 4 of 13
    fracfrac Posts: 480member
    sog35 said:
    Apple needs to start making major acquisitions.

    its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

    friken Cooks sucks.

    He sucks at innovation.
    He sucks at excitement
    He sucks at vision
    He sucks at LARGE acquistions


    Does he suck at rational comments too?
    londorbrakkenwatto_cobrasingularity
  • Reply 5 of 13
    sog35 said:
    frac said:
    sog35 said:
    Apple needs to start making major acquisitions.

    its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

    friken Cooks sucks.

    He sucks at innovation.
    He sucks at excitement
    He sucks at vision
    He sucks at LARGE acquistions


    Does he suck at rational comments too?
    So instead of buying:

    Time Warner
    Twitter
    Netflix
    Tesla
    Disney

    Tim Cook spends $200 billion on buybacks that has done NOTHING.

    friken ridiculous.

    Every other mega tech company is making massive and strategic acquistions. While Apple does nothing. Its beyond pathetic
    What is the point of buying Netflix? That's not really strategic at all. Buying a smaller, innovative company and improving it - like Siri or Authentec, that's strategic. I'm not sure Apple can really do much more with Netflix than what Netflix already does.
  • Reply 6 of 13
    Geez Sog. Please get a grip mate. I used to find your posts entertaining and somewhat worth reading.

    You spent a lot of time slagging Tim Cook weeks ago, then seemed to mellow, and now it's nothing but diatribe again.

    I must admit I'm getting tired of the made up percentages you are always throwing around now. Currently your favourites appear to be 90% or 95%. As in sweeping comments that "95% of people like this" or "90% of people don't use that" or "About 10% of people would never have use of that".

    I made the mistake of not back-ordering iPhone7+ a month ago. My contract finishes Nov 30th and it's looking unlikely that I'll be able to get a 7+ when that happens. Apple must be doing a few things right.
  • Reply 7 of 13
    slurpyslurpy Posts: 5,028member
    sog35 said:
    Apple needs to start making major acquisitions.

    its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

    friken Cooks sucks.

    He sucks at innovation.
    He sucks at excitement
    He sucks at vision
    He sucks at LARGE acquistions


    Looks like sog35 is off his meds, yet again. How sad.
    tmaypalominesingularity
  • Reply 8 of 13
    brakkenbrakken Posts: 674member
    Apple is transitioning away from its former Jobs MkII era and into a mature market leader. I'm quite sure they - Cook et al - have the plans in place to take advantage of Apple's key strengths: SoC's, integrated solutions, customer sat, retail, logistics and customer loyalty. It is not rational to expect Apple will be rolling out a completely new form-factor device that is not integrated within the iOS-mOS-wOS-tOS system.

    But you can bet your pinky finger the Cook era will take tech so far beyond the capabilities of other business models that there will be a tipping point. The ubiquity of IBM/MS/Goog/Java/Linux have never generated the profits combined with the customer interest of the iPod, iPhone, iPad, or Mac. There is no reason to expect Apple will behave so stupidly as MS or Goog - Apple is run by very clever people who also have foresight, two major deficiencies within Apple's competitors. 

    The best way to figure Apple's future direction is to postulate why they aren't buying every other company available. TW is an awkward business deal at best; Twitter makes no money; Netflix makes no money and has its clients on different terms from aTV - little overlap with potential losses; Tesla isn't a real business concern and isn't yet an item worth considering; and Disney is already in Apple's pocket - if it's not broke, don't fix it.

    Apple is reducing outstanding stock. Wall St has done everything possible to weaken APPL, so playing by rules applicable to others does nothing for Apple. Leave that game behind. I expect Apple has its own plans for APPL that we shall discover after the fact, facts that no doubt involve ridiculous anti-Applers in positions of power going for a cash-grab. Apple is protecting itself from an extremely hostile market and nation. I get the impression they are shoring up their defences, and damn be to Wall St BS.

    Cook has stated he is refusing to chase stupid, ugly, uncomfortable, unwieldy, awkward and SO 80's VR to go after AR. I will not be walking about with goggles on my head, but I'd slap in some contacts to check that out! And if AirPods actually do demonstrate a practicable solution to wireless music, I would get them too. (But I seriously doubt it - BT headphones are a great idea but still are not so seamless as they ought to be.) I'm quite sure Apple will prevent Qualcomm from leaking any related tech to the robot crowd. Apple has always successfully charted its own course based on developments in new tech. I don't think they will weaken this position just because of current trends.

    Consumer base is still growing but total sales have flatlined. I'm sure every other company on earth would love to have their products flatlining at the iPhone's level, but you won't read that on any site that runs on click-per-veiw. I know every company ever would love to say their consumer base is still growing, too, and as Apple relentlessly improves its tech capabilities, I expect this to continue. Apple is already past the point - with the 6S I reckon - where competitors can simply copy-cut-paste. As the ostensibly 'open' platform-based companies continue fumbling and feigning, Apple will simply leave them further behind. They all ought to be pretending Apple doesn't exist, and start creating user experiences that their own, current customers want, and to get top customer sat for them: those companies can no longer use Apple as a yard-stick.

    I think it is difficult to expect Apple's future plans because in history, especially in tech, we have never had a company with the business model and success history of Apple. Most of Apple's success has come since the iPhone 4, but that success was built over decades. The internal machinations of a company are reflected in that company's products: cheap, unreliable yet somehow expensive monopolistic crap from MS; free as in free to access all your information advertising company Goog; quirky unfinished but thoughtful and original Ubuntu Mobile; and it seems there isn't really anyone else left. Android successfully killed off all the non-iOS offal out there, except maybe most RIM's moved to iOS... and thusly, people who want to own what they own get iOS; people who want free get Android.

    Apple is contracting compared to its previous profits - a horror for a capitalistic enterprise - but its sustainability is continuing to grow as far as I can tell. Maybe today's Keynote will avail us all of some more insights. Making things people love is Apple's formula, and I'm happy if they just stick with that.
    ronnrob55palominewatto_cobraloquitur
  • Reply 9 of 13
    Apple is a distribution company. It provides a hardware platform but doesn't directly manufacture it. It provides a services platform, but doesn't 'manufacture' the content. It's job is to create a compelling platform and then get as many creators/providers/manufacturers on board as possible. If it starts competing with these providers in a more direct way it could jeopardize that broader distribution. That said, I also think they really don't want to be in that 'messy' side of things - that's not their core strength.
    ronn
  • Reply 10 of 13
    sog35 said:
    sog35 said:
    frac said:
    sog35 said:
    Apple needs to start making major acquisitions.

    its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

    friken Cooks sucks.

    He sucks at innovation.
    He sucks at excitement
    He sucks at vision
    He sucks at LARGE acquistions


    Does he suck at rational comments too?
    So instead of buying:

    Time Warner
    Twitter
    Netflix
    Tesla
    Disney

    Tim Cook spends $200 billion on buybacks that has done NOTHING.

    friken ridiculous.

    Every other mega tech company is making massive and strategic acquistions. While Apple does nothing. Its beyond pathetic
    What is the point of buying Netflix? That's not really strategic at all. Buying a smaller, innovative company and improving it - like Siri or Authentec, that's strategic. I'm not sure Apple can really do much more with Netflix than what Netflix already does.
    The point of Netflix is its the future of television.

    Is it really the future of television? I thought it was the present of television. It already has 90m subs - and those are usually households, not individuals. Buying Netflix or building it in house is not much different to Apple Music, which is a me-too service. I'd rather see Apple spend its cash on doing something that isn't already being done. Disrupt the auto industry or invent the assistant - but I mean the one from Her, not just a slightly better Siri. Change the way we live our lives again.
  • Reply 11 of 13
    sog35 said:
    frac said:
    sog35 said:
    Apple needs to start making major acquisitions.

    its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

    friken Cooks sucks.

    He sucks at innovation.
    He sucks at excitement
    He sucks at vision
    He sucks at LARGE acquistions


    Does he suck at rational comments too?
    So instead of buying:

    Time Warner
    Twitter
    Netflix
    Tesla
    Disney

    Tim Cook spends $200 billion on buybacks that has done NOTHING.

    friken ridiculous.

    Every other mega tech company is making massive and strategic acquistions. While Apple does nothing. Its beyond pathetic
    What is the point of buying Netflix? That's not really strategic at all. Buying a smaller, innovative company and improving it - like Siri or Authentec, that's strategic. I'm not sure Apple can really do much more with Netflix than what Netflix already does.
    Don't forget about Netflix' content distribution network...
  • Reply 12 of 13
    rob55rob55 Posts: 1,244member
    sog35 said:

    ...Apple needs to hire a 'hype man' to be the face of Apple innovation. Make him the CPO (Chief Product Officer) and make his the key speaker at all Apple events for Hardware...
    After SJ's passing, I felt this way too. Seeing Craig Federighi at one of the recent events (last couple of years) made me think he might be the guy. He seemed the most comfortable on stage, was genuinely funny, and seemed to relate to the audience the best. However, he doesn't seem to have been given any more face time (no pun intended) at other events since then. Yes, I realize he's the senior VP of software engineering, but I half expected Apple would utilize him a bit more their events given his apparent success during his parts of those presentations. 
    palominelostkiwiwatto_cobra
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