Amazon.com is in advanced negotiations to buy the mobile chip business of Texas Instruments, according to Israeli newspaper Calcalist, which would put the online retail giant on the path to becoming a manufacturer of smartphone and tablet processors.
Amazon's Kindle Fire tablet is currently powered by a TI processing chip, and the company has been rumored to be developing a smartphone.
But Amazon's interest in TI's mobile chip unit goes beyond smartphones, said NBG Productions chief equity analyst and portfolio manager Brian Sozzi via Twitter.
"It's about owning the supply chain to drive down costs," Sozzi tweeted.
However, the report generated a healthy dose of skepticism among users of Stocktwits.
Plus, it could be a challenge for Amazon to hold on to TI's other clients, including Barnes & Noble (BKS), which uses TI processors in its Nook tablet, and Motorola, which powers a number of its smartphone with TI processors. However, the company, which is a subsidiary of Google (GOOG), features the Qualcomm Snapdragon processor in its new Motorola Droid Razr M.
It's also worth noting that TI's mobile chip business isn't even profitable. During the second quarter, the company posted a net loss of $51 million for the division, as revenue dropped nearly 40%.
Shares of Apple (AAPL) barely budged while the company was unveiling the iPhone 5 Wednesday afternoon. But gaming company Electronic Arts (EA) enjoyed a nice little bump after one of its racing games was featured during the event.
EA's stock was down slightly just before the Apple press conference again and then immediately spiked more than 2% as soon as people started raving in live blogs and on Twitter about how MOREPaul R. La Monica - Sep 12, 2012 2:34 PM ET
|Bill O'Reilly 'mad at God' over sexual misconduct allegations|
|Wanted: 1,000 new Delta flight attendants|
|ESPN ends Barstool Sports talk show after just one episode|
|Richard Branson to parents: Work from home, if you can|
|Entering central London will now cost some drivers $28|