October 15, 2012
Tech Rumors Say Amazon May Buy Texas Instruments Mobile Chip Division
Michael Harper for redOrbit.com — Your Universe Online
Over the years, Amazon has become a prime contender in the tech space, first offering the Kindle e-book reader, then setting themselves up as an online purveyor of digital content like movies and music. Now, Amazon has further expanded the hi-tech hardware side of their business to include 7 and 10-inch tablets, putting them in direct competition with the likes of Apple, Google and Samsung. These hardware giants have quite a bit more experience than Amazon in this industry and, as such, have the upper hand in many ways. For instance, Apple and Samsung develop their own chips for their mobile devices, giving them not only the ability to manufacture these products at a lower price, but also greater control over the end product.
According to tech rumors currently circulating, Amazon might be upping the ante in this market by engaging in talks with Texas Instruments to buy their OMAP chip division.
Assaf Gilad with the Israeli financial newspaper Calcalist reports that this deal could be worth billions of dollars, placing Amazon in direct competition with its hardware rivals. Neither company has confirmed this report, of course, but according to The Next Web, Gilad has a proven track record when it comes to these kinds of stories, accurately reporting on Apple´s interest in buying Israeli´s semiconductor and flash storage manufacturer Anobit.
Late last month, Texas Instruments said they´d be winding down their OMAP mobile chip unit, eyeing a more stable market, such as industrial clients and carmakers.
Texas Instruments has also been struggling to remain competitive in a market where the two largest smartphone manufacturers in the world design and create their own chips. And those companies that aren´t developing their own chips are going to rival companies such as Qualcomm.
"We believe that opportunity is less attractive as we go forward," said senior vice president for embedded processing Greg Delagi during the September announcement.
Amazon´s Kindle Fire uses the Texas Instrument OMAP chip, and such a move could also be considered a commitment to the chip in the coming years. Other companies also use the OMAP chip to power their devices, including Blackberry, Motorola, Nokia and Barnes and Noble. Kindle´s closest competitor, the Nook also uses the OMAP chip, and such a move by Amazon could present the largest online retailer with some very interesting options when it comes to interacting with this rival.
By purchasing the OMAP branch of Texas Instruments, Amazon would gain the ability to control another aspect of their supply chain just like Apple and Samsung. They´ll also have greater control of the design process, enabling them to create devices with a tighter degree of integration.
Finally, Amazon has long been rumored to be interested in designing their very own smartphone which could work similarly to their Kindle Fire tablets, offering users direct access to their digital content as well as a quick and pocketable vehicle into their online retail store. Owning their chip could be yet another foot forward in this decision.