Samsung has just announced that they’ve purchased CSR’s mobile phone connectivity and location technology for $310 million. They’re also getting 21 patents in the deal. Never heard of CSR? They were founded in 1998 as “Cambridge Silicon Radio” and they’ve done things such as design Bluetooth, WiFI, and GPS chips. The thing is, no one buys individual chips like that anymore in today’s market. Companies call up someone like Qualcomm and buy their Snapdragon product which integrates a CPU, GPU, Bluetooth, WiFi, GPS, 2G, 3G, and even 4G LTE. Samsung also bought Nanoradio quite recently; barely six weeks ago. They’re similar to CSR, meaning they’ve specialized in making single purposes chips. Their focus was on ultra low power WiFi.
So now the big question: What’s Samsung going to do with these companies? CSR’s CEO, Joep van Beurden, said this to Reuters earlier today:
“There is a big war going on between the giants of the semiconductor industry like Qualcomm, Intel and Samsung LSI to deliver the complete solution into smartphones. Our team and technology – location and connectivity – is in its own right an extremely important part of that platform, but it is even more important if it completes your product offering and that is exactly what Samsung is doing.”
There you have it. Samsung wants to be able to go to their competitors in the handset business, companies like Apple, HTC, even Nokia, and be able to offer them an integrated solution that will allow them to build a phone in no time. Right now it’s fair to say that the market for these highly integrated chips is dominated by Qualcomm. Most, if not all, of the 4G LTE smartphones sold in the United States use chips that were designed by them.
Samsung obviously wants to enter this space since smartphones have recently begun to outsell personal computers, despite smarpthone penetration being quite low when you look at it from a global perspective.
Translation: Huge market oppertunity.