Google, Microsoft concerned about Broadcom's takeover plans for Qualcomm

By Digit NewsDesk | Published on 11 Dec 2017
Google, Microsoft concerned about Broadcom's takeover plans for Qualcomm
HIGHLIGHTS

Microsoft and Google are apparently worried about Broadcom's reputation for cost-cutting, that might stagnate innovation in the industry.

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Google and Microsoft are apparently concerned about Broadcom's possible takeover of Qualcomm. According to a report by CNBC, the two companies met privately to discuss the matter recently.

One of the concerns is that Broadcom could stagnate innovation in Qualcomm since the company apparently has a reputation for cost-cutting. On the other hand, Google and Microsoft are also concerned about the deal's impact on the Apple-Qualcomm relationship. Broadcom is "pretty tight" with Apple, which could be detrimental to Google and Microsoft in the long run.

That said, Qualcomm rejected a $103 billion bid from Broadcom last month. The company said the offer undervalued Qualcomm and would come under regulatory problems. "The Board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty," Tom Horton, Presiding Director for Qualcomm, said in a statement.

Further, sources told CNBC that Qualcomm has directed Google, Microsoft and other companies not to make public statements against the deal. The company apparently wants to find out whether Broadcom will increase its offer.

The report also cites a possible improvement in Qualcomm's relationship with Apple if Broadcom takes over. The two companies have been embroiled in a court battle recently, with Qualcomm alleging that Apple's infringing on its patents. The company is even trying to get the 2017 iPhones banned in the US. While the case is ongoing at the moment, it could lead to a permanent breakage in the two companies' relationship, and Apple could stop using Qualcomm's chips altogether.

That said, it seems Hock Tan, Broadcom's CEO, has "privately expressed optimism" on settling with Apple if his company were to take over.

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