Amazon in reportedly in talks with Texas Instruments to buy its OMAP (Open Multimedia Applications Platform) mobile chip manufacturing business. According to the Israeli website calcalist.co.il, Amazon is looking to compete with other chip manufacturers such as Qualcomm and Samsung.
Texas Instruments announced earlier this month that it would be shifting its business away from wireless technologies to focus more on enterprise and industrial customers. The company makes the chips that power Amazon's lineup of Kindle Fire products.
With its Kindle Fire mini-tablets, Amazon has found a niche in which it can compete with large hardware manufacturers, such as Apple. The tablets provide customers with a direct feed to many Amazon products and currently dominates the 7-inch tablet market, which Apple is set to enter soon with the upcoming iPad Mini. It makes perfect sense that Amazon would want to control the business that makes an important component of what has become its most important product. Especially if Texas Instruments was intent on shutting that business down.
Assaf Gilad, the reporter who wrote the calcalist.co.il story, points out that Texas Instruments also supplies Barnes & Noble with chips for some of its Nook tablets. It's unclear whether Amazon, were it to actually buy the chip division from Texas Instruments, would allow a competitor to continue a lucrative contract for chips, or whether it would make Barnes & Noble shop around for a new supplier.
(via The Verge)