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Is Apple Taking Talent From Texas Instruments?

The market for third-party mobile processors ain't what it used to be. With Apple (Nasdaq: AAPL  ) and Samsung increasingly dominating the landscape while designing their own chips in-house, there's less demand for the wares of other chipmakers.

Apple took system-on-a-chip, or SoC, production in-house several years ago and has dramatically bolstered its prowess. Its latest A6 chip is a truly custom design -- it was surprising that Apple didn't brag about it. Its performance is very much on par with Qualcomm's (Nasdaq: QCOM  ) Snapdragon chips, except Apple's silicon is only bound for its own devices.

Samsung still taps Qualcomm for some of its models, like the domestic version of its popular Galaxy S3 smartphone. Other times, it puts its own Exynos processors in its devices though.

The ground was shrinking beneath Texas Instruments' (Nasdaq: TXN  ) feet as demand for its OMAP processors dried up. Sure, it scored a couple tablet wins recently with's Kindle Fires and Barnes & Noble's Nook HD, but for the most part has sat idly by as Qualcomm and NVIDIA (Nasdaq: NVDA  ) have all the fun. That's why it recently announced the decision to ditch mobile and roll the OMAP business into its embedded processor segment.

TI's wireless segment has been languishing for years as it's been phasing out its baseband sales and its SoC business shrinks. Some of those engineers will need to go somewhere, and according to a recent report by AppleInsider, Cupertino is welcoming them with open arms. The iPhone maker is supposedly "actively courting" TI talent to bolster its internal development of its A series of chips. Engineers can focus solely on what features Apple wants to build into its chips.

If you thought Apple's chip design strategy was taking off -- which it is -- the company is just getting started.

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Evan Niu, CFA, owns shares of Qualcomm and Apple. The Motley Fool owns shares of Apple,, and Qualcomm. Motley Fool newsletter services recommend, Apple, and NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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10/24/2016 4:00 PM
AAPL $117.65 Up +1.05 +0.90%
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Texas Instruments CAPS Rating: ***