Verizon to acquire Tracfone Wireless
Tracfone Wireless is the biggest wireless carrier that no one has ever heard of. The company, based outside of Miami, is a subsidiary of American Movil, Mexico’s largest telecom company. Tracfone has nearly 21 million subscribers and 90,000 retail locations and seven brands, including Walmart Family Mobile, Straight Talk, Simple Mobile, Total Wireless, Telcel America. Like most MVNOs, Tracfone resells network traffic on the big three carriers, and 13 million of Tracfone’s subscribers are already running on Verizon’s network (62%). The transaction will be for $7 billion in cash and stock. CNET
dis-rup-shun: Why would Verizon spend $7 billion to acquire subscribers that already run on its network? Three reasons, at least: 1. Tracfone has 8 million subscribers that are not running on Verizon’s network. If the carrier can convert some or all of these to its network, it has an instant boost in subs; 2. By cutting out the middleman, Verizon’s net profit per subscriber just increased on 13 million customers; 3. By acquiring seven brands and 90,000 retail locations, Verizon’s sales channels and marketing strategy just exploded.
Oracle the apparent winner of TikTok
After a Trump Executive Order requiring the sale or closure of TikTok, Oracle has reportedly beat interested acquirers Microsoft/Walmart and will be making a major investment in the ByteDance subsidiary. CNBC
dis-rup-shun: The marriage of Oracle and TikTok seems even more awkward than TikTok and Microsoft/Walmart. Oracle is not a consumer facing business and this is a bold departure for the enterprise database master. Perhaps the new Oracle wants to be a mainstream cloud provider and is seeking multiple “front end” software brands to boost its growing cloud infrastructure business in an attempt to close the very wide gap between it and Amazon Web Services.
Nvidia to acquire Arm Holdings
Nvidia is a company that made its mark by being a supplier to high-end video graphics — riding the video game boom of the late 90s that continues today. In years since, Nvidia has become an import supplier of chips that power in-dash automotive entertainment and navigation systems, and for self-driving cars. Arm is the entity that holds the license to the chip architecture used in essentially all mobile phones. Arm is currently owned by SoftBank, a company that has lost a mountain of cash on its investments in WeWork and Uber. The offers is for $40 billion. CNBC
dis-rup-shun: This is a big move for Nvidia, which will now collect royalty payments from giants Qualcomm and Apple who use Arm technology in their own chip sets. Does this signal that Nvidia wants to also be a top provider of Arm processors to the mobile phone industry, or simply a strategic financial play? Probably some of both.
Aston Martin offers race simulator
Want to have the most exotic video racing simulator in your game room? Aston Martin and Curv facing simulators have introduced a carbon fiber cockpit with a large, curved monitor and Formula One simulation software. The rig runs $74,000 and only 150 will be built, so hurry. CNET
dis-rup-shun: If you were thinking about getting into Formula One racing, a $74,000 simulator is an inexpensive way to get your feet wet and find out if it is really what you want to invest a few million into.