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Qualcomm to Acquire Chip Startup Nuvia in $1.4 Billion Deal, Eyes Challenge to Apple, Intel

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By Reuters | Updated: 14 January 2021

Qualcomm on Wednesday said it will acquire Nuvia, a chip startup founded by Apple veterans, for $1.4 billion (roughly Rs. 10,240 crores), with plans to put the firm’s technology into its smartphone, laptop, and automotive processors.

The deal marks a big push by Qualcomm to reestablish a leading position in chip performance after several years of high-profile patent licensing litigation with rival Apple and regulatory authorities.

It also comes amid a change in the helm with Qualcomm announcing this month that Cristiano Amon, its current president and head of its silicon division, will replace outgoing CEO Steven Mollenkopf, effective June 30.

Founded by three of Apple’s former top semiconductor executives in charge of iPhone chips, Nuvia has been working on a custom CPU core design that it had said would be used in server chips.

Qualcomm, however, plans a broad use of Nuvia’s processors, saying they would power flagship smartphones, next-generation laptops, infotainment systems, and driver-assistance systems among other applications.

While laptop makers have traditionally turned to Intel for processors, Qualcomm has been supplying PC chips for several years to firms such as Samsung and Microsoft.

“It’s exciting to see Nuvia join the Qualcomm team,” Panos Panay, Microsoft’s chief product officer, said in a statement on the deal. “Moving forward, we have an incredible opportunity to empower our customers across the Windows ecosystem.”

The deal is also significant because it could help lessen Qualcomm’s reliance on Arm, which is being purchased by Qualcomm rival Nvidia for $40 billion (roughly Rs. 2,93,570 crores) .

Most of Qualcomm’s current chips use computing cores licensed directly from Arm, while Nuvia’s cores use Arm’s underlying architecture but are custom designs. For Qualcomm, using more custom core designs – a move that Apple has also made – could lower some licensing costs to Arm in the short term and make it easier to move to a rival architecture in the longer term.

While Qualcomm and Apple have resolved disputes over Qualcomm’s patent royalties, Nuvia and Apple have been at loggerheads.

In 2019, Apple sued Nuvia’s Chief Executive Gerard Williams III, alleging Williams recruited Apple employees to Nuvia while he was still employed at Apple. Apple did not sue Nuvia itself, nor did it allege any intellectual property theft, and no trial date has been set.

© Thomson Reuters 2020

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Apple Supplier Foxconn Says ‘Limited Impact’ Expected from Chip Shortage

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By Reuters | Updated: 20 February 2021

The chairman of Apple supplier Foxconn said on Saturday that he expects his company and its clients will face only “limited impact” from a chip shortage that has rattled the global automotive and semiconductor industries. “Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd. “Therefore, the impact on these large customers is there, but limited,” he told reporters.

Liu said he expected the company to do well in the first half of 2021, “especially as the pandemic is easing and demand is still being sustained.”

The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn.

Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford Motor Co have cut output as chip capacity has shrunk.

Counterpoint Research says the shortage has extended to the smartphone sector, with application processors, display driver chips, and power management chips all facing a crunch.

However, the research firm predicts Apple will face a minimal impact, due to its large size and its suppliers’ tendency to prioritise it. Apple is Foxconn’s largest customer.

Foxconn is looking at other areas for growth, including in electric vehicles (EVs), and Liu said their EV development platform MIH now had 736 partner companies participating.

He expected it would have two or three models to show by the fourth quarter, though did not expect EVs to make an obvious contribution to company earnings until 2023.

Liu also said the company was still looking for semiconductor fab purchase opportunities in Southeast Asia after not winning a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.

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Apple Privacy Changes: Mobile Advertising Companies Form Alliance to Help App Developers for Update

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By Reuters | Updated: 18 February 2021

Six mobile advertising companies said Wednesday they have formed a partnership to help marketers and app developers adjust to upcoming Apple changes that will affect how advertising works on iPhone models.

Apple will soon begin to prompt iPhone users to allow apps to use their data for personalised advertising, a move that has drawn backlash from tech rival Facebook, which argues the changes will hurt the social media company’s advertisement business.

The Post-IDFA Alliance will provide tips and best practices to help advertisers and developers ensure advertisements are placed in front of relevant consumers and the effectiveness of those advertisements can still be measured after the Apple changes are rolled out, said Mark Ellis, chief executive of mobile marketing company Liftoff, which is part of the alliance.

That will include videos, webinars, and other materials on topics such as understanding what data can be used in an “Apple-friendly manner,” Ellis said.

The new partnership also includes Fyber, Chartboost, Singular, InMobi, and Vungle, which are companies that specialise in mobile advertising.

© Thomson Reuters 2021

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5G Phones May Interfere With Aircraft Altitude Instruments, French Regulator Says

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By Agence France-Presse | Updated: 17 February 2021

The latest generation of smartphones, 5G, can interfere with aircraft altitude instruments, the French Civil Aviation Authority warned Tuesday as it recommended they should be turned off during flight.

“The utilisation of 5G devices onboard aircraft could lead to risks of interference that could potentially result in errors in altitude readings,” a spokesman for the agency told AFP.

The potential phenomenon is due to “signal interference from a close frequency source of a strength that is similar or even superior to that of altimeters.”

This interference can cause errors “in instruments that are extremely critical during landing,” said the agency, known by its French acronym DGAC.

It sent a bulletin on the issue to airlines last week, recommending that 5G phones should either be turned off completely or put in “airplane mode” during flight

Most countries have long required that mobile phones be turned off or placed in airplane mode due to concerns that previous generations of mobile telecommunications networks can interfere with a plane’s navigation and communication equipment.

The DGAC also recommended that in cases of disruption to an aircraft’s equipment that the flight crew immediately notify air traffic controllers who can then alert authorities at the airport.

DGAC also noted that it had laid out conditions for the positioning of 5G base stations in order to limit the risks of interference during landing at French airports.

The strength of signals from 5G base stations placed near France’s main airports has been restricted, said the DGAC, which has been conducting additional testing since November when French telecommunications operators were given the green light to begin rolling out 5G services.

It is continuing to monitor 5G base stations around all French airports in cooperation with the agency responsible for radio frequencies.

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Apple iPhone 12 mini Sales Slow as Smaller Smartphones Lose Appeal: Counterpoint

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By Reuters | Updated: 10 February 2021

Apple’s iPhone 12 mini US sales were just five percent of overall sales of its new phones during the first half of January, industry data provider Counterpoint said on Tuesday, adding to signs of muted demand for the new smaller version of its flagship device.

Smartphone users have switched to larger devices in recent years as they devour more video content on-the-go and binge on visually rich social media platforms like Facebook, Instagram, TikTok, and Snapchat.

JP Morgan analyst William Yang said in a note last week that weak demand for the smaller iPhone 12 and 12 mini Rs. 65,900 might lead Apple to stop production of the mini in the second quarter.

“The product mix adjustment is well expected by investors and should not be a negative surprise,” Yang added.

Apple was not immediately available for comment.

The company launched a smaller variant of the iPhone 12 model last year, but demand for the smaller smartphones seems to be weaker, compared to the high-end iPhone 12 Pro models and the older iPhone 11 models.

“This is in line with what we’re seeing in the broader global market, where screens under 6.0″ now account for around 10 percent share of all smartphones sold,” Counterpoint analyst Tom Kang said.

Apple shipped its iPhone 12 lineup several weeks later than usual last year, but an expanded number of models and new look tapped pent-up demand for upgrades, especially in China.

Last month, the Cupertino, California-based company reported $6 (roughly Rs. 430) percent.60 billion in quarterly revenue from its iPhone models business, beating a record it had set three years ago.

© Thomson Reuters 2021

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Xiaomi Says Legal Complaint Against US to Protect Company’s Interests

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By Reuters | Updated: 1 February 2021

Chinese smartphone maker Xiaomi said on Sunday that its legal complaint against the US Department of Defense and the Treasury Department was to protect the company’s interests, in a notice on the Hong Kong stock exchange.

The company filed a complaint in a Washington district court on Friday against the US Defense and Treasury Departments, seeking to remove the Chinese smartphone maker from an official list of companies with ties to China’s military.

Xiaomi said the US decision to include the company as a “communist Chinese military company” was “factually incorrect” and said it had asked the courts to declare the decision illegal.

The Defense Department, under the Trump administration in mid-January, added Xiaomi and eight other companies to the list, which requires American investors to divest their holdings in the firms by a set deadline.

Xiaomi has said that 75 percent of the company’s voting rights, under a weighted structure, were held by co-founders Lin Bin and Lei Jun, with no ownership or control from an individual or entity affiliated with the military.

© Thomson Reuters 2021

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Xiaomi Files Legal Complaint Against US Defence, Treasury Ban

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By Reuters | Updated: 30 January 2021

Xiaomi filed a complaint in a Washington district court on Friday against the US Defense and Treasury Departments, seeking to remove the Chinese smartphone maker from an official list of companies with ties to China’s military.

The US Defense Department, under the Trump administration in mid-January, added Xiaomi and eight other companies to the list, which requires American investors to divest their holdings in the firms by a set deadline.

In the complaint, addressed to Biden-appointed Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen, Xiaomi called the judgment “unlawful and unconstitutional” and said the company was not controlled by the People’s Liberation army.

It added that the investment restrictions, which go into effect on March 15, 2020, would cause “immediate and irreparable harm to Xiaomi.”

Xiaomi said 75 percent of the company’s voting rights, under a weighted structure, were held by co-founders Lin Bin and Lei Jun, with no ownership or control from an individual or entity affiliated with the military.

It added that a “substantial number” of its shareholders were US persons, and noted three of its top-ten holders of ordinary shares were US institutional investment groups.

“The company’s strategic relationships with US financial institutions – critical for Xiaomi to continue to access the capital it needs to continue to grow in a highly competitive market – will be significantly damaged,” the complaint stated.

“Moreover, the public association of Xiaomi with the Chinese military will significantly impair the company’s standing with business partners and consumers, causing reputational harms that cannot be readily quantified or easily repaired.”

The US Department of Defense and the Treasury Department did not immediately respond to requests for comment.

© Thomson Reuters 2021

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