Samsung’s latest move has some Broadcom (BRCM) investors worried. The South Korean giant is buying a set of connectivity platforms and patents from Great Britain’s CSR plc in a sign that integration of chipsets is increasingly important to smartphone makers. Samsung is paying $310 million for the British chipmaker’s Wi-Fi, Bluetooth and location technologies.
Broadcom makes chipsets that combine Wi-Fi and Bluetooth, and investors initially sent the California chipmaker’s stock down 3% on news that Samsung will now be able to integrate those technologies with its mobile processors. But Broadcom’s stock has bounced back today, probably helped by a Barron’s blog post reminding investors that these products represent less than 10% of the company’s revenue.
Shares of CSR surged 33% yesterday on news of the deal. The company admitted that it was not able to compete with companies like Qualcomm (QCOM) and Samsung (005930.KS) in supplying chips for mobile handsets, and investors were glad to learn that it is selling this part of its business for a good price.
Samsung, the world’s largest seller of smartphones, supplies processors for its own handsets as well as for Apple’s iPhones. Now the Korean company should be able to offer more integrated chipsets that included Wi-Fi and Bluetooth connectivity. However, the intense competition between Apple (AAPL) and Samsung in the marketplace and the courtroom has led to speculation that Apple may be looking for alternative chip suppliers.
