updated 06:20 am EDT, Mon October 15, 2012
Amazon said to be in serious talks with TI over mobile chip business
Amazon is reportedly in 'advanced negotiations' with Texas Instruments to buy out its mobile processor business, according to TNW. If the report is accurate, such a deal could be said to be in the 'billions of dollards,' but would help Amazon gain more control over the design of future devices. Amazon is TI's largest customer and uses its mobile processors throughout its Kindle Fire and Kindle Fire HD tablets.
TI recently announced that it was planning to transition its business away from its current emphasis on developing OMAP processors for consumer mobile devices to the embedded processor segment, with a particular focus on the automotive industry. Competition with Samsung and Qualcomm was forcing it into the lower end of the market, where profit margins were not as great. An Amazon tie-up could help facilitate the transition more quickly.
Amazon entered the tablet space dominated by Apple in the fourth quarter of 2011 with its first Kindle Fire, which proved to be the most successful disruptor in tablet segment since Apple launched the iPad in early 2010. Both Apple and Samsung, Amazon's key competition, have much greater control over the design of the processors in their devices. The acquisition of TI's mobile processor business could help give Amazon a similar competitive advantage in better tailoring its devices.