Great Plans ahead for Amazon: Potential TI Acquisition and Additional “Amazon Phone” Rumors

19 Oct

Sometimes it’s easy to forget that the mobile device market isn’t always going to be ruled by the likes of Apple, Google, and Samsung. Having begun with the humble Kindle e-reader in 2007, Amazon quickly climbed the ranks within the crowded hardware market, using the conveniently sized and affordable Kindle Fire to not just win the hearts of consumers, but also establish its name within the tablet industry. The respectable performance of the Kindle Fire device, along with its growing popularity, is arguably a major reason behind Apple’s alleged decision to step into the “mini” tablet territory.

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Recently, a specific rumor that is certain to get people talking again is Amazon’s potential plans to acquire Texas Instruments’ mobile chip division. While neither party has offered a confirmatory statement, a wave of skepticism is already floating in the air. According DailyFinance, Amazon’s revenue figures for 2Q12 is only about 50% the amount in 2Q11, a surprise considering that the company supposedly made $3 billion more in revenue during 2012. Various sources have also pointed to the monstrous amounts of expenses spent by the company, which include those on cloud service investments, warehouse expansions, and various other technological and operating costs.

At this point, TI’s mobile chip division will likely serve as a hefty—if not questionable— investment for Amazon, seeing how TI is reportedly struggling with its mobile chip unit, and considering that there are better, arguably cheaper acquisition options out there (ie. MediaTek). An estimate by Deutsche Bank analyst Ross Seymore shows that the chip maker’s OMAP business may cost around $500 million to $700 million USD, although others are saying that the investment could also be worth “billions of dollars” for Amazon.

The major incentive behind the acquisition, no doubt, would be Amazon’s growing hardware ambitions. It is no news that TI is responsible for making the processors for many of Amazon’s popular Kindle products. It is also widely speculated that Amazon will be planning to add a smartphone to its growing line of mobile products. Should Amazon and TI successfully reach an agreement, the latter’s chip division will likely ease the internet company’s burden on smartphone production costs, in effect making it possible for the company to eventually rival to Apple and Samsung.

To add to the acquisition rumors, a recent report from UDN reveals a few possible evidences concerning Amazon’s smartphone plans. The retail internet company, according to the report, is allegedly turning to suppliers such as Foxconn and Toshiba to help manufacture the new phone. It is speculated that the handset may measure around 4 to 5 inches, and could be released as soon as next year.

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