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Apple Appears Set to Lose Bid for iPhone Display Chip Maker to Synaptics

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MacRumors

macrumors bot
Original poster
Apr 12, 2001
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Back in April, rumors indicated Apple was in talks with chipmaker Renesas Electronics over the potential acquisition of its Renesas SP Drivers division, which produces chips for smartphone displays including for the iPhone.

As it turns out, Renesas Electronics appears set to sell its stake in Renesas SP Drivers to Synaptics, another chip manufacturer, instead of Apple. According to Reuters, the talks between Apple and Renesas "failed to make progress", leading Renesas to move forward with Synaptics. Apple was originally offering 50 billion yen or $479 million for Renasas' 55 percent stake in the company, which is also partially owned by Sharp and Powerchip.
Apple Inc had also been in talks about a possible purchase of the stake in Renesas SP Driver in what was seen as a potential move to shore up its global supply chain, but the sources said those talks failed to make progress and Renesas had narrowed its consideration to Synaptics.
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Apple currently uses chips from Renesas Electronics in its iPhone displays, improving both image sharpness and battery life. It is unclear how a failed acquisition would affect the ongoing relationship between the two companies.

apple_renesas_synaptics_logos.jpg
While Reuters suggests that the deal between Renesas and Synaptics is all but certain, Nikkei claims that Apple is still interested but that pricing was a major obstacle.
Apple still seems interested in acquiring the unit. Renesas "hopes to reach an agreement with Synaptics on the sale and will continue to try to persuade Apple to give in," a person familiar with Renesas' plans said.
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Renesas was also reportedly convinced by some of its non-Apple customers that their access to the company's components could be cut off if Apple were to acquire the division, driving Renesas to give an edge to Synaptics.

Despite the possible failure to purchase Renesas SP Drivers, Apple's effort is part of a trend that has seen the company take a keen interest in controlling its own production supplies and core technologies in recent years. Apple recently signed a deal with sapphire producer GT Advanced Technologies and has also purchased several chip firms in the past, including P.A. Semi and Passif Semiconductor.

Article Link: Apple Appears Set to Lose Bid for iPhone Display Chip Maker to Synaptics
 
Article Link
https://www.macrumors.com/2014/05/27/apple-iphone-display-chips-synaptics/
nostaws

nostaws

macrumors 6502a
Jan 14, 2006
520
472
Wow. I didn't know Japan had fallen on such hard times. I'd better take my American dollars and head over there.

MacRumors said:
Apple was originally offering 50 billion yen or $479 for Renasas'
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On a more serious note: Apple can't pony up the dough for a chip maker but is allegedly ready to buy beats for billions?
 
G

genovelle

macrumors 68020
May 8, 2008
2,100
2,677
nostaws said:
Wow. I didn't know Japan had fallen on such hard times. I'd better take my American dollars and head over there.



On a more serious note: Apple can't pony up the dough for a chip maker but is allegedly ready to buy beats for billions?
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I'm sure this chipmaker is not bringing in 1.5 billion a year with high margins like beats. Chips is a low profit market and this was for only a 55% stake. I'm sure their purpose was to make sure a competitor didn't get them. I don't think they will mind if this company does.
 
nostaws

nostaws

macrumors 6502a
Jan 14, 2006
520
472
Don't confuse valuation with revenue with profit.

Beats has never earned a PROFIT of $1.5 billion per year. It might sell $1.5 billion worth of headphones. But, with that $1.5 billion in revenue they have to pay to make the headphones they sell, advertise, run the company, etc.

Beats as a company is valued somewhere between $1 billion and $1.5 billion.

genovelle said:
I'm sure this chipmaker is not bringing in 1.5 billion a year with high margins like beats. Chips is a low profit market and this was for only a 55% stake. I'm sure their purpose was to make sure a competitor didn't get them. I don't think they will mind if this company does.
Click to expand...
 
IJ Reilly

IJ Reilly

macrumors P6
Jul 16, 2002
17,909
1,496
Palookaville
nostaws said:
Don't confuse valuation with revenue with profit.

Beats has never earned a PROFIT of $1.5 billion per year. It might sell $1.5 billion worth of headphones. But, with that $1.5 billion in revenue they have to pay to make the headphones they sell, advertise, run the company, etc.

Beats as a company is valued somewhere between $1 billion and $1.5 billion.
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If Beats' margins are close to Apple's (and I suspect they are), then their annual earnings can be fairly estimated at around $500M. This would make the company very cheap indeed at $1-1.5B, as that would be a ratio of only two or three times earnings, and doesn't even take any of their assets into account.
 
I

iolinux333

macrumors 68000
Feb 9, 2014
1,798
73
IJ Reilly said:
If Beats' margins are close to Apple's (and I suspect they are), then their annual earnings can be fairly estimated at around $500M. This would make the company very cheap indeed at $1-1.5B, as that would be a ratio of only two or three times earnings, and doesn't even take any of their assets into account.
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Maybe they can start distributing some crappy Chinese EarPod copies they can get off a streetcorner vendor in Shanghai and bump their worth by a few $billion.

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iolinux333 said:
Maybe they can start distributing some crappy Chinese EarPod copies they can get off a streetcorner vendor in Shanghai and bump their worth by a few $billion.
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And maybe they can hire someone to make an app for them too. Crappy EarPods plus an app should be worth $2billion at least!
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
Hmmm. $479m. Synaptics (SYNA) has a $2B market cap. Up 50% for the year and a P/E of 40 so they can afford to overpay for the tech and Apple can keep using the tech until SYNA crashes at which time AAPL can buy them on the open market for a 50% discount. Super high short interest right now.

They are pouncing while they can! Root for them to do it in time!

Apple's time will come.

Rocketman
 
R

raycruz87

macrumors newbie
Jun 5, 2014
1
0
Are the iPad mini non retina and iPhone 5 going to support predictive text? I have the beta but am not able to use this feature.
 
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