Qualcomm won’t be splitting off its chip-making business, after all
Qualcomm’s got a lot of proving to do in 2016. While still very much on top of the mobile SoC game, the company suffered the sting of a lot of bad publicity this year as critics latched on to reports of overheating and performance issues with the flagship Snapdragon 810. Justified or not, those stories cast a shadow over Qualcomm’s chip business, and expectations are high for phones built around the new Snapdragon 820 to start redeeming the company. But will the 2016 Qualcomm even be a company we recognize? Earlier this year we heard that the firm was considering splitting its business in two, separating the arm that designed new chips from the arm that licensed patents to other companies. Today we finally get a follow-up, with word arriving that Qualcomm will ultimately stay intact.
The way we heard things back in July, if Qualcomm was interested in maybe finding a buyer to acquire it someday, splitting its operations would help make it (or at least part of it) a much more attractive purchase. The company appointed a committee to investigate the value of such a move, and now it’s come to its decision: Qualcomm’s better off staying together.
As CEO Steve Mollenkopf puts it, “The strategic benefits and synergies of our model are not replicable through alternative structures.” Some of those benefits include being better equipped to invest in new research and bringing new technologies to market.
Maybe one day it really will make more sense for Qualcomm to break into multiple pieces, but for the time being, it’s staying as-is.
Source: The Wall Street Journal