Samsung Electronics Co. Ltd. has agreed to pay CSR plc (Cambridge, England) $310 million for its handset connectivity and location operations and the associated technology. Samsung has also agreed to invest an additional $34.4 million to take a 4.9 percent stake in publicly-held CSR.
The deal leaves CSR free to focus on higher margin business and growth areas such as: voice & music, automotive infotainment, indoors location finding, imaging and Bluetooth smart.
CSR, founded as Cambridge Silicon Radio Ltd. in 1998 as a spin off from Cambridge Consultants, plans to return up to $285 million of the Samsung money to shareholders via a tender offer. The deal is expected to close in the fourth quarter of 2012.
CSR has entered into a conditional binding agreement to transfer of CSR's development operations in handset connectivity and location, including 310 people, together with certain rights over CSR's technology in these areas. However, none of the revenues associated with CSR's existing handset products will be transferred.
In addition CSR retains the rights to use future connectivity and location technology, such as CSR9800, in areas other than handsets and mobile devices.
This does explain why Kanwar Chadha, co-founder of SiRF, left CSR recently. http://www.eetimes.com/electronics-blogs/rambling--round/4376371/Mr--GPS-leaves-CSR
But CSR's strategy begs the question.
I fail to see where in the world CSR, wtihout the mobility part of it, will be able to find "higher margin business and growth areas." The release lists "voice & music, automotive infotainment, indoors location finding, imaging and Bluetooth smart."
Really? Are they higher margin business???
These are definitely lower volume areas, that's why they are mentioned to be "higher margin" because, in theory, higher volume means lower margin, and vice versa.
The question is: are these non-mobility or not? If CSR is only targeting non-handset related business, they will be reduced to a niche player and become irrelevant very soon.
A neat way to put it.
It looks like CSR is acting on the principle that much of what used to be its domain of a separate chip in the handset will soon be wrapped up in the platform-SoC.
They are moving on to pastures new - whether they can be as successful as they have been is another matter.
But they got $310 million for their efforts, which as they say is not a bad return.
Indeed the mobile app processor is the vacuum cleaner of handset tech.
The press release leaves some questions unanswered:
--Didn't Samsung have basic Bluetooth and GPS tech and patents yet for its Exynos line?
--What's left for CSR and what the heck is Bluetooth smart?
Bluetooth "Smart" = Bluetooth Low Energy, from the Bluetooth Core Spec 4.0 and later. There are over 2 dozen profiles defined over it so far, with a lot more in the pipeline.
There is plenty of business there.
It seems a good deal for Samsung but may not be good to CSR, besides investor can immediately gain some money back. I don't know if CSR is having something totally different from radio connectivity that they think can shine and give them "high margin", but I really doubt it!
I guess the "handset connectivity and location operations " include Bluetooth, WiFi and GPS solutions. Is that correct? CSR selling bluetooth business is like selling the soul of the company. What is left out at CSR to generate any revenue?
That is a hefty price for those few technologies. I am interested to see what Samsung can do with those few acquisitions. The huge injection of funds in CSR would certainly give it a lot of room to focus on its other businesses, but then it announces that they will return much of the money to Samsung shareholders. I wonder what the strategy to that is.
Jeanette - http://www.lyonessscamreview.com