Qualcomm to buy iPhone Apple Pay chip manufacturer NXP for $47 billion

The deal, if approved by regulators, will put the one-time manufacturer of the motion co-processor and the current supplier of the Apple Pay near-field communication chipset under Qualcomm's control.

Besides just supplying the NFC and authentication chips for Apple Pay in the iPhone and Apple Watch, NXP supplies a number of solutions to automotive vendors for automotive "infotainment" displays, as well as a variety of wired and wireless networking chipsets.

Qualcomm currently supplies Apple with the cellular modem found in some models of iPhone 7, with Apple choosing to use an Intel-produced modem to diversify its supplier base, and not be reliant on any one supplier for key components.

A subsidiary of Qualcomm will tender an offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, representing a total enterprise value of approximately $47 billion.Â The offer has been unanimously approved by the boards of directors on both companies.

The move appears to be a strategic one by Qualcomm to widen its customer base. According to Qualcomm's own financial data, Samsung and Apple are responsible for 50% of the company's consolidated revenue, and a manufacturer shift by either away from its products would have profound effects on earnings.

The combined company is expected to have annual revenues of more than $30 billion. Neither company is expecting any regulatory resistance to the deal.

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13 Comments

stantheman

said about 7 years ago

Qualcomm's market cap is $100 billion, and it has a huge franchise. Paying almost half that amount for NXP suggeste that Qualcomm expects mobile payments and other NFC applications to become a dominant technology in coming years.

ireland

said about 7 years ago

Speaking of large acquisitions...

Apple would acquire Netflix for around $70B and it would complete Apple TV as a living room strategy and it would put the ATV ecosystem of apps front and centre as a result. $9.99 per month, $6.99 on Apple TV. I'd go for it if I were Apple.

There's no one who understands new content like Netflix and no one who has their distribution channel. It's a lot of money but their new content lineup will become huge over the next 10 years. They'll own streaming. Snag them while you can, I say.

I've made similar comments to this a few times, but let's face it this is what Apple and missing for their living room product. You don't a third party control the fate of your destiny. They need to own this.

~2020, Netflix rebrand: Apple TV

rob53

said about 7 years ago

ireland said:

Speaking of large acquisitions...

Apple would acquire Netflix for around $70B and it would complete Apple TV as a living room strategy and it would put the ATV ecosystem of apps front and centre as a result. $9.99 per month, $6.99 on Apple TV. I'd go for it if I were Apple.

There's no one who understands new content like Netflix and no one who has their distribution channel. It's a lot of money but their new content lineup will become huge over the next 10 years. They'll own streaming. Snag them while you can, I say.

I've made similar comments to this a few times, but let's face it this is what Apple and missing for their living room product. You don't a third party control the fate of your destiny. They need to own this.

~2020, Netflix rebrand: Apple TV

It's interesting you talk about Netflix and new content in the same sentence. My wife watches Netflix to get to the old, subtitled movies, not new ones. Of course she's already watched all the new ones as well and is now bored with Netflix's selection. Apple TV needs access to broadcast TV before it wastes its money on buying something like Netflix. Netflix is already available on Apple TV so why buy it? Let the people pay for what they want. If Apple could buy one broadcasting company I'd like to see them buy Discovery Communications (https://en.wikipedia.org/wiki/Discovery_Communications). This isn't just the Discovery channel anymore, they're huge, making up the majority of the channels offered by cable and satellite companies. Netflix is like Redbox, they just collect and rent old movies.

$Forum User frac$

frac

said about 7 years ago

sog35 said:

Apple needs to start making major acquisitions.

its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

friken Cooks sucks.

He sucks at innovation.
He sucks at excitement
He sucks at vision
He sucks at LARGE acquistions

Does he suck at rational comments too?

franklinjackcon

said about 7 years ago

sog35 said:

frac said:

sog35 said:

Apple needs to start making major acquisitions.

its embarassing that companies like Qualcomm and AT&T and Charter that have a fraction of Apple's cash and cash flow is making huge strategic acquistions and Apple is standing pat holding its cash like an old grandma in her mattress.

friken Cooks sucks.

He sucks at innovation.
He sucks at excitement
He sucks at vision
He sucks at LARGE acquistions

Does he suck at rational comments too?

So instead of buying:

Time Warner
Twitter
Netflix
Tesla
Disney

Tim Cook spends $200 billion on buybacks that has done NOTHING.

friken ridiculous.

Every other mega tech company is making massive and strategic acquistions. While Apple does nothing. Its beyond pathetic

What is the point of buying Netflix? That's not really strategic at all. Buying a smaller, innovative company and improving it - like Siri or Authentec, that's strategic. I'm not sure Apple can really do much more with Netflix than what Netflix already does.