NEW YORK -- The recently announced CSR-Samsung deal, under which Samsung Electronics will acquire CSR’s handset connectivity/location development operations and its technology, was an easy sell to the financial community. Everyone loved it.
After all, the British chip company, which originally made its name in Bluetooth chips, was losing ground in smartphones to bigger rivals who were combining more functions in a single platform. Offloading struggling business units to a lucrative buyer is a business practice highly valued on Wall Street.
But then, what’s left of CSR -- with no connectivity and location technologies at its core?
A closer look at the two companies’ agreement reveals a few bullet points that the casual observer might have overlooked.
-CSR’s indoor GPS technology will not go to Samsung. Its development team will stay with CSR; and its technology is neither up for sale nor available for licensing.
-CSR, in fact, has high hopes to sell its indoor GPS chips as a standalone product – lots of them – to mobile handset vendors.
-CSR isn’t entirely giving up Bluetooth. It will focus on Bluetooth low-energy technology.
-CSR is not allowed to sell connectivity products (Bluetooth, WiFi) into the handset/mobile field; but the same rule doesn’t apply to its location technology. CSR is “generally unrestricted” regarding commercialization of location technology (GPS) into any field.
-CSR, however, is not restriction-free for many ventures the company might contemplate in the future. The fine print in the agreement prevents CSR from selling location products combined with an apps processor in the handheld/mobile field (10 years), or granting any of its location technology rights to an apps processor company (two years).
In a nutshell, CSR isn’t entirely bowing out of either location or connectivity businesses. Nor is it walking away from the mobile market. (CSR will sell indoor GPS chips to mobile handset vendors; CSR’s aptX audio codec has been adopted by Samsung’s latest smartphone to deliver CD-quality stereo over Bluetooth wireless connectivity.)
The British company has apparently managed to keep what they view as differentiated parts of its connectivity/location technologies, while unloading increasingly the commoditized WiFi, Bluetooth and GPS technologies that are now getting integrated in mobile apps processors or baseband chips.
Well, that’s the theory. But drilling down into the agreement, decipher what CSR can and cannot do for for certain periods of time in various scenarios, and the deal seems pretty complex. Has CSR put itself into a straightjacket?
Joep Van Beurden, CSR’s CEO, (left) says no. “The big picture [of this deal] is straightforward,” he said in a recent interview with EE Times.