Broadcom‘s $103 billion bid for rival chipmaker Qualcomm could ease a lengthy war with Apple, analysts said Monday.
Qualcomm and a have long been embroiled in a patent lawsuit — each tech company suing the other in a high-priced back-and-forth. Apple alleges fraudulent royalty charges, and Qualcomm alleges patent infringement.
“While Qualcomm is pursuing the dispute in the courts in an effort to maximize the value of its IP, an acquirer wouldn’t need to maximize value — an acquirer would only need to settle for a rate that would provide a positive ROI,” Chris Caso of Raymond James Equity Research said in a note.
Apple CEO Tim Cook last week commented on the ongoing battle and reiterated the company’s stance on Qualcomm’s alleged wrongdoing.
“If you back up and look at this, what is happening is that [Korea’s Fair Trade Commission] has found Qualcomm guilty and fined them in the past few weeks,” Cook told CNBC’s Josh Lipton. “The Taiwan justice department has found Qualcomm guilty and fined them. The U.S. FTC sued them and has a suit going on. The EU is investigating them. And so I think it’s pretty clear that there are problems there.”
Broadcomm, for its part, has a pretty cordial relationship with Apple, as one of the smartphone giant’s main component suppliers.
“Broadcom and Apple have a much more cohesive partnership, in contrast to the hostility and lawsuits you have between Qualcomm and Apple,” RBC Capital Markets’ Amit Daryanani told CNBC’s “Squawk Alley” Monday. “So Broadcom may logically think, and we think it’s fair, that they could resolve these regulatory litigation issues more easily than Qualcomm is doing right now.”
The soothing effect could extend to the industry at large, according to Anil Doradla of William Blair & Co.
“This could mark a new benign environment,” Doradla told CNBC in the same interview. “Some of these litigation issues have been resolved, [but] they are still a thorn for many.”
Source: Tech CNBC
A Broadcom deal could help fix Qualcomm's problems with Apple