Apple considering ARM acquisition?

Apple Online Store“Talk of mega-takeover bids for a pair of FTSE 100 companies had investors excited today,” Rosamund Urwin reports for The Evening Standard. “The City’s gossips were pushing two tales: that Apple is considering a bid for ARM Holdings and that Vale could make an offer for Xstrata.”

“Of the two yarns, most investors seemed to think an approach was more likely for ARM, the Cambridge-based technology company which was recently promoted to the top flight,” Urwin reports. “The chipmaker’s shares shot up 8.1p to 251.1p, topping the Footsie winners’ list, as more than five million shares changed hands by midday.”

“Apple is ARM’s biggest customer and speculation is that the iPad maker wants to take chip design in house,” Urwin reports. “‘A deal would make a lot of sense for Apple,’ said one trader. ‘That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.’ Traders reckon a bid would come in at around 400p a share, valuing ARM at more than £5.2 billion.”

Urwin reports, “The takeover speculation was fuelled by stellar second-quarter figures from Apple last night smashing Wall Street’s forecasts. This was good news for ARM even without a bid, because ARM pockets royalties from the sale of iPads.”

Full article here.

MacDailyNews Note: ARM was founded (as Advanced RISC Machines Ltd) as a joint venture between Acorn Computers, Apple Computer and VLSI Technology in 1990. Today, ARM processors are used in almost all modern mobile phones, handheld gaming devices, portable media players, GPS, and many other devices. ARM Holdings (ARMH) currently has a market cap of US$1.9 billion. Debt-free Apple currently has $41.7 billion in cash and short term investments on-hand.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]

52 Comments

  1. This would make perfect sence. Apple can definatly afford this and will have ARM designs all to them selfs. In effect forcing all other electronic makers to use something else. Most mobile chips are based off ARM technology so this would turn the mobile electronic industry upside down. Muhahaha.

  2. Well, if Apple can develop and build their own processors and video chips (ARM, AMD), maybe they are planning on buying the Dell facilities in Austin to start assembling computers with imported and domestic parts for a mini-tower with a Light Peak and my God this new medication is really making my mind wander……………………………….Granpa, is that you?

  3. For all the hot air about Apple having a mobile “monopoly”, buying ARM and then cutting off other buyers wouldn’t make much sense. Apple thrives on being the best product in an open market, rather than trying to squeeze out competitors.

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