Reports indicate that Google and Microsoft have expressed concerns over Broadcom’s bid to acquire Qualcomm. According to sources the two tech giants are concerned that the deal would give Apple undue influence. Additionally Google and Microsoft are concerned about the reputation of Broadcom of cutting costs instead of making investments in new technology.
Last month a $105 million bid was rejected by Qualcomm and this led to the nomination of new directors by Broadcom. Before granting approval to a deal, regulators seek input from the industry in order to make an informed judgment. Qualcomm has already indicated that a takeover by Broadcom would raise antitrust issues. But sources also indicated that Google, Microsoft as well as other firms have been instructed by Qualcomm not to issue public statements which would signal opposition to the deal.
Sources further indicate that prior to making the next move, Qualcomm is interested in finding out if Broadcom will raise the takeover bid by increasing the price-per-share beyond $70.
“We don’t think the offer was in the ballpark of value. We’re nowhere near it. At least that’s my view. Of course the board has to decide,” said the chief executive officer of Qualcomm, Steve Mollenkopf.
If Broadcom goes ahead to acquire Qualcomm, the relationship between Apple and Broadcom stands to be improved. Currently Broadcom is a chips supplier to Apple for use in the iPad and the iPhone.
Currently there is a patent feud going on between Qualcomm and Apple with suits and countersuits having been launched between the two companies. To date Qualcomm has patents numbering over 130,000 mostly for smartphone technology and the litigation could see Apple abandoning the chip maker for future projects. The chief executive officer of Broadcom, Hock Tan, has however indicated that in the event that chipmaker acquired Qualcomm, the ongoing patent feud would be settled.
One of the reasons that has been put forward as to why Google and Microsoft are against the deal is because it would result in little to no competition. Most of the device makers who use Android operating system deploy processors from Qualcomm. Microsoft also recently announced that it would be releasing Windows 10 personal computers which use Qualcomm chips and these are said to consume less power compared to PCS that use Intel chips. But despite Google and Microsoft being household names the world over, they cannot beat Samsung or Apple with regards to the quantity of chips they purchase from either Broadcom or Qualcomm.