Lets not read too much into it, the deal announced this week between Qualcomm and AMD, to buy a handful of handset based graphics and multimedia technologies which mostly come out of its ATI Technologies acquisition back in 2006, could be just that, a bargain basement technology swap of technology it has already been paying a license fee for. The deal cost Qualcomm $65 million, and the two companies have not gone into great detail about the assets which changed hands.
But if you were looking for a broader reasoning you would have to take in the landscape of Intel and its Atom netbook chip, and the entire shift to netbooks, disk free connected miniature PCs with enough battery to work on for 8 hours. ATI rival Nvidia has announced a roadmap, Freescale is chasing hard, Qualcomm will take the Intel route head on with its Snapdragon processors, its Gobi software defined radio and closer relationships with both Microsoft and Google Android while AMD has hummed and ahhhed about will it, wont it, enter this, the bottom end of the market
So the deal could be clearing the way for wider co-operation on laptop and netbook devices, where AMD might offer pre-configured boards containing Qualcomm chips, to PC manufacturers. Just an idea, nothing has been said. Even if it is no simpler than if Intel is my enemy, then AMD is my friend.
Certainly the current weakness of Windows Mobile, the sudden development of the netbook market, have both provided Qualcomm the opportunity to buddy up to Microsoft to help it survive in a netbook market which could settle on Windows, Android, Linux or even Symbian. Which in turn weakens the Window Intel axis, something that is also good for Qualcomm in the long term.
Qualcomm has also acquired intellectual property and all the resources which were formerly the basis of AMDs handheld business and is said to allow Qualcomm to strengthen in next generation mobile user experiences.
‘This acquisition of assets from AMDs handheld business brings us strong multimedia technologies, including graphics cores that we have been licensing for several years’, said Steve Mollenkopf, executive vice president of Qualcomm and president of Qualcomm CDMA Technologies. ‘Bringing this technology in-house creates even greater synergy as we seamlessly integrate the best-in-class multimedia performance AMD offers into our system-on-chip (SoC) products.’
AMD has a need right now to concentrate on core business. It bought ATI in July 2006 for $5.4 billion, mostly in cash, with some shares and straight away took an impairment of $1.3 billion to write of the goodwill in the transaction.
ATI gave its PC and handset based graphics chips, graphics accelerators and has been a strong provider to Nokia, with its chips driving music playback, 3D gaming, streamed mobile TV and video playback through ATI’s Imageon line. So while the deal might also be seen as a way of doing Nokia a favor to take one of its suppliers out of questionable finances, AMD was at pains to say that the Imageon processor is not part of this deal.
Already Broadcom has taken a dip out of some of the ATI assets, spending $196 million in August 2008 to pick up the digital TV assets of AMD, more ATI chipsets, this time the Xilleon, its NXT receiver chips and its Theater processor, including some ATSC capability.