If a new report by Israeli newspaper, Calcalist, claiming Amazon is in “advanced talks” with TI over purchasing its mobile chip division is accurate, the smartphone market is going to continue getting more interesting. While the deal is still far from final, the internet is already buzzing, as such as acquisition would immediately give Amazon a strong foothold against rivals Samsung and Apple which each have their own in-house chip development currently ongoing. On top of that, Apple uses some of TI’s hardware in their latest iOS devices meaning a unique partnership would have to be formed similar to the one Apple’s shared with Samsung (though is now deteriorating rapidly).
Amazon has long been seen as a software/services-only company. And it makes sense to be just that. Software and services are cheaper to develop, distribute and upgrade. Licensing hardware manufacturing responsibilities to third parties also keeps costs down. But despite that, Apple has had amazing success developing their own software as well as hardware within company owned walls, and in fact is one of the reasons Apple’s hardware/software mesh so well – they control and design everything. Over the last couple of years, though, Amazon has moved into the hardware realm anyway. And their recent successes with the Kindle Fire line of e-reader/tablets has shown that the old stigma of hardware costing more than it’s worth hasn’t taken hold yet.
If Amazon goes through with a purchase of Texas Instraments’ mobile chip division, it’ll mean even more vertical integration ala Apple, and a much bigger threat to Apple’s tried and true method of developing, producing and selling products; competition. We’ve seen Amazon get quite popular in the mobile world being mostly hands off in terms of hardware. If they can get the right hardware engineers and designers under their roof, then we should really see the gloves come off. And that’s a great thing.