It is ironic for S&M to be talking about acquisitions when QC is about to lay off thousands. What is the rationale?
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OP: Rationale? SM bought over 6,000 shrs. yesterday and Davis bought over 8,000 shrs. So I'm guessing the rationale is money.
Going from premier digital communications company to "Pimp my ride" consumer electronics company is no small feat. Can't wait for smartphone controlled underglow lights on my 4 banger honda!!!
It is a make versus buy decision and takes into account time to market. QC definitely wants to expand into other markets (IoE, Mobile et al). I agree with one post that says QC is not good at integrating companies because of internal politics and turf battles. All is not most of the top management of Atheros is now gone post acquisition. QC will need to get better at integrating if they want to become successful in the M&A game. The new CFO seems very much in favor of doing big acquisitions as well as cutting costs. Time will tell if QC can be successful in this next chapter and if they can move beyond the one trick pony status.
CSR will be merged with QCOM next month. The integration team has been working on it since
end of last year. Last week China approved the acquisition. Everything is on the schedule.
CSR will be delisted in a couple of weeks. Regarding layoffs, that's inevitable due to the overlap.
QCOM is interested in CSR's automotive and BT technology. Their automotive SoC is used by many
auto manufactures. Their BT is used by many mobile audio (BT speaker) manufactures.
The BT team is mainly in UK and auto team is mainly in China. CSR's revenue declined to 770M in 2014.
Some offices will be closed and some products will be shutdown or sold. QCOM will be let people go
in a couple of months. This coincides with the time CSR becomes part of QCOM and makes things a little easier. This means the CSR headcount reduction is part of QCOM layoffs. Based on CSR's revenue, it is much higher than the 15% of QCOM layoff. QCOM will handle that separately.
imho,QCOM turning out to be one trick pony who monetized their initial cellular patents very successfully ( mainly due to their clever legal team),Mobile boom created ton of unexpected cash and this cash created and supported various projects in pursuit for next goldmine.QCT semi part of business was intended to be a loss leader to drive IP adoption quickly( to earn hefty royalty)... but looks like things moved way too fast and went out of control. We got caught offgaurd with attacks from multiple direction playing out at same time making our executive team panicked and run towards protecting their interests...and dump engineers.
Futuristic Screens (Mirasol) - Flopped. Super-sleek wireless chargers - Flopped. IN-house CPU design - Flopped(Armdragon 810). I think Q needs to buy either an antenna company or a plastics company, there seems to be 1 or 2 pieces of cellphone that they haven't flopped with, YET !!!
Why not AMD? Should be great for both Graphics and Server
If Hock Tan of Avago can do a Leveraged Buyout of Broadcom, then why can't Qualcomm LBO Nvidia? Again, I think it may come down to Jen-Hsun Huang (Nvidia CEO) not wanting to take orders from Steve.
current NVDA market cap almost exactly how much was borrowed for accelerated share buybacks. Funny how things work out sometimes.
If he's really serious about Data-Center, I think Nvidia is the only way to go. But they might not be for sale :-.
but what markets to chase? and how much to overpay?
The rationale is the current low performing employees are not adding to the bottom line. So dump them quick with the layoff. M&A brings in new revenue sources. If you are too dumb to understand the difference between a layoff and m&a, you don't deserve a job at a high tech company.
consider your employment terminated.
QC has been innovating, or trying to anyway. Just look at the number of pet projects and R&D projects. There is no more to be squeezed, when so much brain power has already gone into innovation. Buying more divisions may bring some short term revenue, but in the long run there will be more layoffs, as productivity wanes.
QC need to innovate something new in mobile...I totally agree large M&A will not work for Q. ATHR acquisition was a big flop. But hey they have to do some acquisitions to pacify investors and buy time ( till vesting their that BIG stock grant) .
QC (QCT) is a chip company and it needs operate like one. If margin is low, then it needs to watch OPEX. Instead, QC spends like a licensing company on chip development. If QC is not capable of managing mobile chip development, what do you think will happen with new acquisitions outside of mobile?
True, QC is the leader in mobile but the market is becoming a commodity; how is Q going to compete on price against Mediatek and others in this context? Even heavy layoffs and outsourcing to low cost locations may not be sufficient to compete. They have to find ways to grow revenues and cut costs in a somehow stagnant semiconductors sector.
Maybe S&M is not a good study of history. Most companies that attempted mobile have failed, but they continued to do well within their core competency. QC’s competency is mobile, and it is likely to fail outside of mobile. M&A will take QC down a path of failures and layoffs.
What is CSR’s contribution to the layoff pool?
CSR Acquisition alone will bring 2,000 employees.
LBO LBO LBO LBO!
Simple, there will be more engineers who can be laid off
S&M is just full of hot air. First, to get out taking heat for dropping revenue, he got consultants to tell him that his needed to lay off thousands. Then, to please the investors, he is jumping on the bandwagon of semiconductor consolidation. We are in deep, deep crap.
http://www.bloomberg.com/news/articles/2015-07-28/qualcomm-will-be-m-a-player-as-chipmakers-consolidate-ceo-says?cmpid=yhoo
Link? At the earnings call he stated, "Asked whether the cost-cutting plan will affect mergers and acquisitions, Mollenkopf said that the company hasn’t changed its philosophy, but added that at the same time management expects to be focused on executing on the restructuring efforts." Link: http://recode.net/2015/07/22/live-qualcomm-talks-to-wall-street-amid-major-restructuring/
If M&A strategy is true, basically QC is telling its employees they are pulling their own weight, and so, QC going to get more people from other companies.
Mergers and acquisitions
What's M&A?