The heat and the prick

Friday, November 16, 2007

I was rather pleasantly surpised to see Qualcomm acquire Firethorn Holdings, a mobile banking company. It coughed up $210 million to set its foot on rather unfamiliar territory. Though it is unclear how Qualcomm plans to use the acquisition, there are few things that pop up about this event -
  • Increasing footprint beyond its core competency areas is essential for its long-term growth. An acquisition like Firethorn can help Qualcomm achieve this. Besides, it will give Qualcomm more visibility as the mobile revolution takes center-stage. As a chip vendor or as an IP powerhouse, it will not get attention from the consumer. Software offers a better brand-marketing avenue, especially if the related domain hits it big.
  • Offering an integrated solution has always been one of Qualcomm's strengths. In fact, it has been one of its market-share strategies, its differentiator in the market place. Ask for the chipset and you get a bunch of drivers for free. Now, with software prowess in a domain that could potentially be ubiquitous in tomorrow's mobile world, it can provide a complete silicon solution. I would love to carry a phone and only a phone. If it can replace my credit card etc that I carry in my wallet, it will be perfect. With its hardware design leadership, this sounds like a good synergy.
  • Looking at this initiative in the context of Android adds more glitter. Android is perhaps a bull-dozer effort. Google can pump in the money and the effort to get its platform into mobile phones. With smart-phones and other convergence devices slowly becoming the norm, an acquisition like this, as offbeat as it may sound signifies some vision. The timing is perhaps more important and indicative of Qualcomm's gamble. Announcing this close to the heels of the Android announcement reinforces its belief in the future of communications.
So Qualcomm, what is next?

Posted by Vijay Nagarajan at 7:00 PM  

0 comments:

Post a Comment