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Poll: Will Broadcom Acquire Qualcomm?

This poll will close on 03-21-2018 at 09:13 AM

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Thread: Broadcom buying Qualcomm just won't happen? (Poll)

  1. #11
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    Broadcom just raised it's bid to $82, which might be a high enough price to get the deal done IF management and the board can be won over. AVGO made no indication that they would go hostile, and Hock is not someone to overpay so this very well could be his best offer. There are still regulatory concerns, although Hock has been creative in the past about working around those - In this case spinning off QTL would probably help assuage regulators.

    I'm 50/50 if this gets done or not. There were, in my mind, 3 pieces to getting this deal done - price, management support, regulatory approval. I think the price is now right, but it remains to be seen if management will support the bid, and if regulators will approve it. Management has a tough decision here and I don't envy them. If they don't support the bid, there will be an activist backlash.

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  2. #12
    Admin Daniel Nenni's Avatar
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    Quote Originally Posted by count View Post
    Broadcom just raised it's bid to $82, which might be a high enough price to get the deal done IF management and the board can be won over. AVGO made no indication that they would go hostile, and Hock is not someone to overpay so this very well could be his best offer. There are still regulatory concerns, although Hock has been creative in the past about working around those - In this case spinning off QTL would probably help assuage regulators.

    I'm 50/50 if this gets done or not. There were, in my mind, 3 pieces to getting this deal done - price, management support, regulatory approval. I think the price is now right, but it remains to be seen if management will support the bid, and if regulators will approve it. Management has a tough decision here and I don't envy them. If they don't support the bid, there will be an activist backlash.
    I don't think QCOM management can be won over because they will lose their jobs, all of them, and it will not be the best ending to their career legacy. Apple really did sink QCOM here. This is one for the history books, absolutely.

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  3. #13
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    Daniel, I now think you were right the whole time, the buyout will happen.
    After Imagination Technologies and Qualcomm (not that they were ever on the same league), who will dare fight Apple now? This may not be good for the mobile ecosystem, shows Apple too strong and creates uncertainty around Qualcomm which is itself very important to the Android ecosystem.

    Imagine if next step Broadcom sells parts of QCOM to Apple?

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  4. #14
    Admin Daniel Nenni's Avatar
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    Quote Originally Posted by mbello View Post
    Daniel, I now think you were right the whole time, the buyout will happen.
    After Imagination Technologies and Qualcomm (not that they were ever on the same league), who will dare fight Apple now? This may not be good for the mobile ecosystem, shows Apple too strong and creates uncertainty around Qualcomm which is itself very important to the Android ecosystem.

    Imagine if next step Broadcom sells parts of QCOM to Apple?
    Qualcomm is spilled milk. So is MediaTek and the rest of the smartphone SoC centric fabless companies.

    I had an interesting discussion today with a qualcomm customer who competes with Apple. Since they do not make their own chips it takes a lot longer to get a system out and they are limited in what they can do. On the other hand Apple uses simulators, emulators, and FPGA prototyping to start the software development process even before the chip tapes out and way before first silicon gets back. And the chip is customized to the software which is why Apple gets a new phone out every year. How is a systems company who buys chips and uses Android going to compete with that? Apple also gets a customized process from TSMC that no one else gets and has most favored nation status with the supply chain in regards to pricing and capacity...

    The only answer is for systems companies to do their own chips and that is what is happening in all markets. Smartphones is already a done deal. Apple, Samsung, Huawei, Google, etc... the 800lb Gorillas own this market. Automotive is next and the rest of the systems companies in all other markets had better be on the silicon trail if they want to stay in business. You can bet Hock Tan saw this coming which is why he is playing fabless clean-up and will continue to do so.

    The only way I see to stop Apple is to disrupt them like they disrupted hundreds of companies with the iPod, iPad, and iPhone. Otherwise the other guys will have to be satisfied with the NOT APPLE market which, in regards to margins, is getting smaller by the day, absolutely.

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  5. #15
    Blogger Eric Esteve's Avatar
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    What you say is true, Dan. Apple is making and will generate most of the profits from the mobile. Nevertheless, marketing principles teach us that it's possible to create successful business case in every segment. Clearly, it's too late to compete on the same segment than Apple.
    An interesting example: in France, the top 3 smartphone supplier (by revenues) is:
    #1 Samsung
    #2 Wiko
    #3 Apple

    You don't know Wiko? That's normal, they only play in French market, selling good quality smartphones (euros 100 to 250), not the same features/positionning than S. and A., but OK. (Apps Proc. is coming from China, S/W developed in France). That's one option.

    But, for large chip company searching for high growth market segments, automotive is certainly attractive, data center could be an option, but then you compete with Intel.
    IoT? Industrial IoT will grow, but at a differente rate than mobile or consumer.

    Consumer oriented IoT? Do we really think that wearables or smart home will become huge segments? As far as I am concerned, I don't! Nice for the buzz, not for the revenues...

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