Qualcomm Inc (NASDAQ: QCOM) is buying Arduino, the popular maker of low-cost circuit boards, to get closer to robotics startups and hobbyists.
The company announced Tuesday that it is acquiring Arduino, the Italian electronics company known for its low-cost programmable circuit boards.
Arduino’s products are widely used in hardware startups and robotics labs for prototyping new ideas. The deal will make Arduino an independent subsidiary, though Qualcomm did not disclose a purchase price.
The acquisition gives Qualcomm direct access to hobbyists, tinkerers, and early-stage robotics companies. Arduino boards are not designed for commercial products, but they are popular for testing concepts and developing proofs of concept. Consequently, Qualcomm sees an opportunity to build loyalty among the next generation of hardware developers.
“You start to move towards prototyping, proof of concepts, and once you’re ready, you can go commercial, which is something we are obviously very familiar with,” said Nakul Duggal, Qualcomm’s general manager for automotive, industrial, and embedded Internet of Things (IoT).
In addition, Qualcomm aims to diversify its revenue beyond mobile chips and modems. The smartphone market has slowed, and Apple is moving toward its own modem chips. In the most recent quarter, Qualcomm’s IoT and automotive businesses accounted for a combined 30 per cent of revenue from chip sales.
Currently, smaller developers struggle to access Qualcomm chips because the company sells them in large quantities to established enterprises. However, rival Nvidia offers developer kits for its robot chips, available for as little as USD$249. Nvidia has called robotics its biggest growth opportunity after artificial intelligence.
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Analyst consensus is Moderate Buy
Further, Qualcomm has acquired two other companies in the past year—Foundries.io and Edge Impulse—to become more essential to robotics developers. Duggal noted that Qualcomm hopes to eventually power humanoid robots, which require AI computing power similar to self-driving cars.
Tuesday’s announcement said Arduino will, for the first time, release a board equipped with a Qualcomm chip. The company will charge USD$45 to USD$55 for its new board, called the Uno Q, and include a Qualcomm Dragonwing QRB2210 processor. The chip can run Linux alongside Arduino software and can perform computer vision, translating camera input into software data.
Currently, Arduino boards use lighter microcontrollers from companies including STMicroelectronics, Renesas Electronics, Microchip, and NXP Semiconductors. These chips are not powerful enough for advanced AI tasks. Qualcomm will continue selling its competitors’ chips through Arduino, maintaining compatibility for existing users.
Duggal emphasized that Qualcomm does not plan to make significant changes to Arduino’s operations, management, or developer community.
“My success criteria is that the Arduino ecosystem doesn’t even feel that there is any change in ownership here,” said Duggal.
Analyst coverage of Qualcomm is robust, with a consensus rating of “Moderate Buy” based on 25 Wall Street analysts.
The average 12-month price target is USD$182.82, indicating an upside of 10.22 per cent from the current price of USD$165.85. Price targets range from a low of USD$140 to a high of USD$225. Furthermore, analysts from firms such as JPMorgan Chase, Citigroup, Piper Sandler, and Rosenblatt Securities have maintained buy ratings. They cite Qualcomm’s strategic positioning in AI and 5G markets. However, some analysts express caution due to challenges in licensing agreements and competition in the smartphone sector.
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joseph@mugglehead.com
