Qualcomm buys Bluetooth and GPS chip maker CSR for $2.5B
Qualcomm announced that it has agreed to acquire chip maker CSR for $2.5 billion in cash as part of its continuing strategy to dominate the electronics in mobile devices. — San Diego, Calif.-based Qualcomm will add a wide variety …
Context & Ripple Effects
CSR is being picked over twice: Samsung took its mobile handset business for $310M in 2012, and what remains — the Bluetooth and GPS silicon — now goes to Qualcomm for $2.5B. For Qualcomm this extends a playbook dating back to its 2006 purchase of Airgo and RFMD's Bluetooth assets: buying the short-range radios that sit alongside its modems rather than building them.
First-order effects
- Qualcomm folds CSR's Bluetooth and GPS chips into a portfolio that already gained gigabit WiGig via the Wilocity acquisition confirmed in July, giving it one of the broadest connectivity stacks in mobile.
- CSR's remaining shareholders exit for cash at a valuation far above what Samsung paid for the company's mobile arm two years earlier.
Second-order effects
- The deal lands mid-fight over connected-home standards: Qualcomm already backs an interoperability framework with LG against the rival Samsung-Intel-Dell effort, and owning more of the Bluetooth base strengthens its position in that standoff.
- Rival chipmakers competing for sockets in phones and household gadgets now face a Qualcomm that can bundle cellular, WiGig, Bluetooth, and positioning into fewer line items.
Third-order effects
- With Qualcomm having posted its smallest quarterly revenue increase since 2010 and the smartphone market tilting toward China, acquisition of adjacent silicon like CSR points to chip consolidation around full-connectivity platforms rather than standalone modem vendors.
The trend: As smartphone growth slows, leading mobile chipmakers are consolidating short-range connectivity silicon through acquisition to defend their share of every radio inside a device.