It might not be the most eye-catching news report, but Broadcom‘s attempts to buy Qualcomm could have a significant impact on the technology industry, an impact that the likes of Google, along with Microsoft, are concerned about.
Google reportedly feels that such a takeover would stagnate innovation, since Broadcom is reportedly known to emphasize cost-cutting over developing new technologies. Remember that the vast majority of Android smartphone manufacturers use Qualcomm chipsets, while Microsoft has recently been pushing to also equip PCs with Qualcomm chipsets, so any pause on development of new technologies would directly and indirectly impact both of their businesses.
Another concern is the relationship Qualcomm and Apple would have if Broadcom were to succeed with the buyout. Currently, we wouldn’t say that Qualcomm and Apple are on friendly terms with each other, giving the ongoing court proceedings between the two companies. Most recently, Apple accused the chipmaker of infringing on eight of its patents related to battery efficiency.
More specifically, Google and Microsoft are concerned that a Broadcom-owned Qualcomm would be more inclined to side with Apple than with other companies. This concern was further emphasized, given Broadcom CEO Hock Tan’s optimism over settling the ongoing litigation between Apple and Qualcomm.
Qualcomm might have known that other companies might not be thrilled with Broadcom’s attempted buyout, since the chipmaker reportedly asked Google and others to not make public comments that oppose the deal. Even so, there is a possibility that they will take a firm stance against the deal, though they also want to know if Broadcom will make a higher bid for Qualcomm.
Remember that the buyout is not official — Qualcomm rejected Broadcom’s initial $105 billion offer. We are unsure whether Qualcomm is either outright refusing a purchase or simply posturing for a larger bid, but from the sounds of it, Broadcom will not back down — the company proposed replacing Qualcomm’s entire board of directors that rejected the deal, according to The New York Times.
We’ll keep a close eye on things as they continue to unfold, but do you think that Google and Microsoft have a right to worry? They’re companies, so I guess it makes sense for them to worry if their interests might be trampled on.