Qualcomm rejects Broadcom's $103B takeover proposal
reuters.com
reuters.com
Qualcomm's stock took a dive since Apple (25% of their revenue) said they might not need them for their next models. They're probably gonna wait to bounce back.
It's going to take years to sort out and will cost a lot - stock has already tanked 2x what Apple's lost revenue was worth, so the market thinks this is not only more damaging than currently told, but also that they won't recover
I can't see them surviving years without being taken over
Broadcom's offer was a pretty generous one, and if they were to make it to minority shareholders, they'd probably be successful. Unsure how much of qualcomm's capital is in the hands of the board or their associates..
Sounds pretty damn good to me.
(Sorry HN “this is not reddit” comments ensue)
(Get a sensor of humor you drones)
https://en.wikipedia.org/wiki/ISS_%28disambiguation%29
Near the bottom of the list, you'll find "Institutional Shareholder Services, a proxy advisory firm":
https://en.wikipedia.org/wiki/Institutional_Shareholder_Serv...
Broadcom/AVGO likely assumes that their bid to takeover Qualcomm would not be met with smiles. Broadcom can convince Qualcomm shareholders to replace the board with one that will accept the offer (or subsequent offers). Once the friendly board is in place, they might halt the NXP acquisition (forfeiting some good-faith deposit to NXP) and convince regulators that they would divest Qualcomm's IP from their semiconductors. This would make regulators happy and it would set the stage for them to court AAPL for future design wins.
Is that even legal?
Anti-Trust law requires consumer damage under the modern interpretation and its hard to see how a globally competing business would satisfy that.
I feel this might have something to do with the anti-trust case.
It's curious to me because China does multiple things that wouldn't be allowed in the EU. Like working far too closely with the government can be allowed for Chinese companies, but mergers between them can still be rejected by the EU?
I'm not sure what would be the procedure if they went ahead anyway, but when you control €500M+ in sales in your jurisdiction, you have a strong position.
[1]http://content.time.com/time/business/article/0,8599,166732,...
I know of three LTE modem manufacturers: Qualcomm, Intel, Mediatek.
I also wish Samsung would sell its Exynos chips to other smartphone OEMs. They've hinted in the past that it's Qualcomm the one blocking them from doing that with patents. Regulators should take a closer look at that.
The problem here isn't that Samsung doesn't want to license Qualcomm's patents, but that Qualcomm DOES NOT license their patents to their baseband competitors (eg, Samsung, Mediatek, Intel); instead Qualcomm wants to collect royalties from the end-device makers (eg, HTC, Samsung Mobile).
This is precisely why anti-trust/competition regulators have been going after Qualcomm recently.
It's not like QCom are NPE trolls. They actually did all the ground work of creating CDMA as a viable technology. The patent system is there to reward them for their research efforts.
In other words, Qualcomm voluntarily declared their wireless patents to Standard Setting Orgnizations (SSO) such as ETSI, ITU, etc to become part of standards that all chipmakers must implement. Qualcomm is, under their agreement with SSO's, required to license their wireless to all willing licensees at FRAND terms. In exchange for giving up their monopoly, Qualcomm gets guaranteed income from all uses of wireless standards such as LTE in baseband chips, or mobile phones.
Qualcomm is still very much relevant in the phone industry.
I think there are plenty of radio modem makers/competitors now. It's not to say that it's easy to make your own chips, but the real problem here is that Qualcomm does not believe in licensing their wireless patents to baseband makers. Qualcomm wants to collect royalties from OEM's customers instead for greater licensing fee.
Really, I'm wondering what happens whenever 5G or whatever comes after 4G/LTE comes around. And in how long approximately that will be.
Even if some competitors will make 5G chipsets, they still will have to build in everything from good ol' GSM over EDGE over HSxPA to 4G in addition, because what use is a phone (or IoT gadget!) that only works in major urban areas where 5G deployments will happen first? All this will have to incorporate Qualcomm patents at the least, and most likely also Qualcomm chipsets.
Hell when I drive to the German country side I more often than not only have EDGE, and the situation in developing countries is even more dire.
"Inprise"[1]
[1]: https://en.wikipedia.org/wiki/Borland#The_Inprise_years.2C_a...
Avago Corp. now called Broadcom run by that Monkey man Tan will ruin Qualcomm into bits and pieces. Just like how Broadcomm was ruined, back then the key people left & by selling tons of IP slashing $300M off the same fate will happen to Qcomm, first they will strip off the mega Patents which Qcomm holds and sell them off to offset this $103Bn. Because that Tan is interested in the NXP only due to the massive Automotive and IoT treasure (https://www.eetimes.com/author.asp?section_id=36&doc_id=1332...)
Surpisingly this is where Apple comes. Apple's iPhone's chipsets have tons of Broadcom tech and they share ties with them, Apple may even buy them, Slowly the Android will die because no other corp apart from Qcomm manages the OSS SRC development, CAF and XDA development speak for themselves. For the better or worse, Qcomm is the ONLY leader in the OSS SoC game. Period.
Because Intel doesn't do that and they retired after the Z3000 series powered ZenFone2 which has great processing at CPU with x86 for Android but poor SGX GPU from Imagination Technologies & total lack of drivers and documentation made no OEM to opt for Intel.
Exynos (Samsung's) focus shifted when past Exynos powered SII, SIII was the last. Now the cat and mouse game happens with their Knox lockdown on the Note5+ phones.
Mediatek is not even worth considering they are anti-GPL, HiSilicon (Huawei's) Kirin is in the same page as Exynos, Open Kirin is only a try to grab XDA attention and budget game. Because once you make the chipset with Neural Engine which will be under closed doors (NPU in Mate 10, Kirin 970) it won't be like Tensor Flow at all. Forget the OSS development under it.
Xiaomi doesn't bode well either with their super long 3-6mo wait times for kernel src drop they don't even stand a chance against the Qcomm's Snapdragon SoCs and their CAF in both performance or the Open nature. (Read- https://www.xda-developers.com/gplv2-and-its-infringement-by...)
Also Qcomm is responsible to destroy the SD80x platform off support due to the CTS check for vulkan driver and lack of Nougat (Android 7.x) Reason ? Because these Corporates don't want to trust the OEMs, and provide all documentation, If it leaks their IP is at stake of imitation, security issues. It's a dangerous game. (Read- https://www.xda-developers.com/in-depth-capitulation-of-why-...)
And also Pixel, it's way worse now with removal of Accesibility services threat (Read - https://www.xda-developers.com/google-threatening-removal-ac...) & (http://www.androidpolice.com/2017/11/12/google-will-remove-p...) (https://www.reddit.com/r/Android/comments/7c4go5/is_google_p...)
Removal of overlay over other apps (Read - https://www.xda-developers.com/android-o-is-breaking-apps-th...) Removal of granular battery stats (Read - http://www.androidpolice.com/2017/03/22/android-o-feature-sp...) their new Pixel's Visual core is made by Intel (Read - https://www.xda-developers.com/google-intel-pixel-visual-cor...) and the functions it offers so far on the 8.x DP is just 2 (Read-https://www.xda-developers.com/developers-cant-test-hdr-pixe...)
So basically Google is now becoming Apple #2, with slamming doors infront of developers, Headphone jack fiasco, Overpriced trashware iPixels, also they have a secure Element chip + A/B system making TWRP issues...(Read - https://www.xda-developers.com/magisk-v14-4-root-pixel-2-xl-...)
And coming back Qcomm did every innovation and acquired Patents legally for more than $25Bn, Most of them include 4G/LTE and 5G R&D having a lead over Intel/Mediatek by 20Months but they are raising price for that chip or license deals & as Apple wa earning a lot over the iPhones, Qcom license works per phone profit basis. So they started this war against Qcomm since they are not new to kill off the ones who have higher revenue as their producer-customer relationship like GT Adv tech ( Read - https://www.reuters.com/article/us-gt-advanced-tech-bankrupt...), Imagination Tech (Apple's so called inhouse GPU is nothing but Imagination's IP after poaching a few of the key people they decided to drop ball Read - https://www.anandtech.com/show/11243/apple-developing-custom...) have Intel,which are inferior to the X16/20 modems at just 600Mbps vs Qcomm's 1.2Gpbps downlink.
Apple vs Qualcomm started long back, dating back to 2007 and WiMax threat to Qualcomm, (Read this - https://www.eetimes.com/document.asp?doc_id=1332242) but now Qcomm gets razed due to the Apple's global domination. Plus NXP antitrust scrutiny. Unless they get that NXP, Apple will continue to blaze them & Broadcom too.
This is what Apple does to industry, I suspect wearing my Tin Foil hat, They pressed Broadcom of this deal on Qualcomm, now even Huawei is dropping royalities for Qualcomm and SKTC asking to renegotiate Qcomm IP licensing it's a mess, because despite the Qcomm's nature of Patent wars they are the only OE who support OSS which is most crucial aspect nowadays regarding a smartphone vs Planned obsolescence.
Ultimately Broadcom is dangerous. NXP deal should move else Qcomm will lose money due to Apple war and there are ton looming around..& remember vote with wallet.
Second, what they said is correct on an annual basis. The value of that merger, at $103 billion, exceeds the annual GDP of numerous nations.
Before you make an absolute statement about their confusion, perhaps you should ask for clarification first. What they said was not strictly wrong.
The economic output of an entire nation can be useful for such comparisons when you're attempting to relate to very large financial figures.
But, can’t beat em, join em.
Qualcomm is basically Estonia. Qualcomm’s revenue multiple is about 4.25X. Using that multiple, Estonia should have a similar valuation.
Qualcomm has the higher growth rate, but Estonia has been a country for a while with a loyal customer base. Qualcomm’s customers will probably use whatever chips come wired into their phone. Estonia’s are likely to stay Estonian unless a disruptive innovator comes along with a 10X improvement. 10X, not 10%. Think big Putin. If we weigh these against each other, it’s about even.
So… Estonia’s National valuation is about $103.4, based on $24bn in gross stuff (yuck).
Just kidding!. That’s preposterous of course. Qualcomm is investor backed, Like Tesla. Estonia is debt backed, like a country. You can’t compare those either, and you’d know this if you read all the cranky HN pedantry from before! Someone tried to compare Tesla to GM, the fool!
What we need is Estonia’s enterprise value…. Now, that’s apple’s to apple’s. Also, Russia, NATO and stuff.
> calling Milton Friedman “on the Austrian side of economics.”
Which is pretty laughably wrong for someone at least a bit educated in the area.
But, since you've conceded the point on pedantry, I'll give you a 3rd shivic. Which would you prefer, chicagoshivic?
I repeat: It's comparing a stock and a flow. You cannot compare a stock and a flow because they are different units. 103bn per year vs. 103bn as a volume of wealth. You could compare 103bn to the wealth of a country. Or you could say that it is equal to N empire state buildings, or a number of dollars that goes around the world X times. But if you compare it to GDP, then you're not comparing apples to apples.
That's drastically different from having to have a large pile of "different dollars" to make a large purchase like this.
That puts into perspective how reasonable it is to expect to be able to make $10-20-50m building and running a business.
To be fair to AB InBev, they had to give up substantial portiona of SABMiller to get the merger through which as you said was a $100B+ [cash] deal. Combined company revenue is supposed to rise by around $11B this year. While SABMiller did $19B in revenue alone before the merger. SABMiller sold off at least $25B of the company before or during the merger. Not always for the best price either as all sides knew the sales had to happen.
Have you never compared your car’s gallon-per-mile rate of fuel consumption with its gas tank’s size in gallons?
It makes sense to relate to GDP if what you're looking for is a well understood scale to use as a reference for very large financial numbers.