Early Hour Movers: Clearwire Corporation (NASDAQ:CLWR) & Texas Instruments (NASDAQ:TXN)

TI mobile chip business acquisition, Amazon in talks: Reports

A Israeli financial newspaper has reported that Amazon.com, Inc.(NASDAQ:AMZN) is in talks with the company which supplies chips for its Kindle tablet and that the discussions have reached an advanced stage. The possible deal with the smartphone chip-making arm of Texas Instruments.

Incorporated(NASDAQ:TXN) could be worth billions of dollars and would place Amazon in direct competition with smartphone makers, California based Apple and South Korea based Samsung Electronics, companies that design chips for their own products.

"It would make sense, as the chip is a critical component and Amazon has an existing relationship with TI," said Nick Dillon, an analyst at Ovum. "With the trend towards more vertical integration, led by Apple, speculation that Amazon is interested in TI's chipset arm is unsurprising," said Ben Wood, head of research at CCS Insight.

However, not all analysts are convinced of the wisdom of such a move. Many feel that several independent smartphone chip makers are running heavy losses and Amazon should not be spending billions on acquiring such a business.

Amazon shares were trading higher at $241.90, down 0.14%. Texas Instruments on the other hand, was trading at $28.10, up 3 percent.

Softbank - Sprint deal drive Clearwire shares up

News that Softbank Corp, the Japanese mobile phone company, is going to buy a majority stake in Sprint Nextel Corporation(NYSE:S) sent Clearwire Corporation(NASDAQ:CLWR) shares flying in pre-market trade Monday. Sprint owns about half of Clearwire. Softbank plans to take a 70 percent stake in Sprint for $20.1 billion.

Clearwire runs a wireless broadband network that Sprint sells as Sprint 4G. Clearwire finds it difficult to operate on a standalone basis and needs funds for network upgrades.

However, the deal with Softbank does not require Sprint to take any action pertaining to Clearwire.

Clearwire shares rose 14 percent to $2.65, up 33 cents in the morning session, extending its one week gain to over 115%.

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Amazon.com, Inc. (NASDAQ:AMZN) Negotiating To buy Texas Instruments (NASDAQ:TXN)’s chip business

Online retailer Amazon.com, Inc. (NASDAQ:AMZN) is in talks to buy the mobile chip business of Texas Instruments Incorporated(NASDAQ:TXN), Israel's financial newspaper, Calcalist said on Monday.

Amazon.com has already entered the tablet PC segment and is rumoured to be entering the smartphone segment as well soon. Having its own chip making business will put it in direct competition with technology giants such as Samsung and Apple, both of which design their own chips.

Calcalist did not give any other details bout the proposed transaction but said that the value of any deal would run into billions of dollars.

Last month Texas Instruments had publicly said that it wold shift its focus in the wireless segment to a broader market and away from smartphones. It is looking at industrial clients such as in the automotive sector where it hopes to get more stable business and better margins.

TI had also said that while it would continue to support its customers, its mobile app chip business would not invest in supporting customers' future roadmap for tablets and smartphones.

At present Amazon uses TI's chips for its kindle range of tablets.

Chips are an important part of any computing device as they dictate how powerful any such device would be and how fast it can run.

It has gained more importance in the case of tablet PCs and smartphones which are now vying with traditional computing devices and muscling into their territory.

Faster and powerful mobile devices that can do most of the functions that are now reserved for laptops can well put the latter out of business. 

Shares of TXN are up over 2% in pre-market trading and AMZN surged 0.51%.

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