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Would it ever be worthwhile to do this as a means of devaluing a company so that you could purchase it? In this case, if Apple wanted to buy Qualcomm, would thi

Would it ever be worthwhile to do this as a means of devaluing a company so that you could purchase it? In this case, if Apple wanted to buy Qualcomm, would this be an effective means of reducing their valuation?

MR4D 8y ago
A means, yes. Effective, probably not. Existing Qualcomm shareholders would probably sue the heck out of them during the merger, and it would be difficult to close, raising the overall cost.
yayana 8y ago
Maybe, but not for Apple, who could be in for a world of regulatory hurt if they owned a monopoly in the cell phone stack. Apple wants to commoditize their complement to take the most profits for each finished device. This is why the quote from their lawyer is to not let Qualcomm walk away from Apple presenting a challenge to their patent legitimacy. https://www.gwern.net/Complement#2 https://www.gwern.net/Complement#2
wyldfire 8y ago
Apple isn't doing this because they want to acquire Qualcomm. They don't like having their biggest competitor in their supply chain but there's few viable modem vendors.
- vlozko 8y ago
  I doubt it would pass antitrust review were that the case. Qualcomm is the only viable US market chip company that high-end phones can use. All the existing patents and agreements don’t go away if it were to be acquired.
  - wyldfire 8y ago
    Maybe you misunderstood my comment, here's some additional context for what I wrote: (1) Apple competes with Qualcomm today (indirectly via many vendors who ship snapdragon-based phones). (2) Apple is pretty good at supply chain controls. (3) Apple uses [until recent designs] Qualcomm modems in their iphone/ipad.
leoc 8y ago
I'm not an expert, but it seems that may be something like the oldest trick in the book. Commodore under Jack Tramiel, for example, had a reputation for doing this kind of thing: it's rumoured to be how they ended up owning their CPU supplier MOS Technology. (Not that I think Apple is up to that kind of thing in this case.)

MR4D 8y ago

A means, yes. Effective, probably not. Existing Qualcomm shareholders would probably sue the heck out of them during the merger, and it would be difficult to close, raising the overall cost.

yayana 8y ago

Maybe, but not for Apple, who could be in for a world of regulatory hurt if they owned a monopoly in the cell phone stack. Apple wants to commoditize their complement to take the most profits for each finished device. This is why the quote from their lawyer is to not let Qualcomm walk away from Apple presenting a challenge to their patent legitimacy. https://www.gwern.net/Complement#2 https://www.gwern.net/Complement#2

wyldfire 8y ago

Apple isn't doing this because they want to acquire Qualcomm. They don't like having their biggest competitor in their supply chain but there's few viable modem vendors.

vlozko 8y ago
I doubt it would pass antitrust review were that the case. Qualcomm is the only viable US market chip company that high-end phones can use. All the existing patents and agreements don’t go away if it were to be acquired.
- wyldfire 8y ago
  Maybe you misunderstood my comment, here's some additional context for what I wrote: (1) Apple competes with Qualcomm today (indirectly via many vendors who ship snapdragon-based phones). (2) Apple is pretty good at supply chain controls. (3) Apple uses [until recent designs] Qualcomm modems in their iphone/ipad.

leoc 8y ago

I'm not an expert, but it seems that may be something like the oldest trick in the book. Commodore under Jack Tramiel, for example, had a reputation for doing this kind of thing: it's rumoured to be how they ended up owning their CPU supplier MOS Technology. (Not that I think Apple is up to that kind of thing in this case.)