“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.]
KenC is the smart adversary.
Buying ARM to cut off supply to competitors would not be as good a move as buying ARM to insure unlimited access to their latest, greatest (and custom) products at the best possible prices while continuing to sell to competitors at a profit.
If Apple wants to buy Arm I hope they do a better job of locking the deal down and acting-than they did in the AdMob attempt.
I wouldn’t want to see Google buy Arm.
@KenC
Sometimes when I’m a jerk I find my special purpose. Then I feel a whole lot better.
That is *** STUPID ***:
Apple sell off ARM’s shares through years — and it had enough money to buy it then, and Jobs was already projecting iPhone.
Nothing changed in ARM’s status or Jobs concepts.
So why all of sudden he would want to buy ARM now?
@DeRS
Apple can force the world to use intel Atom and let them stink.
1st thing they’ll do is drop the price of iPads even more, by subsidising it with the profit they earn from apps and movies.
Then they’ll drop the price for the iPads again, killing competition like no other.
Would probably be good for Apple not so good for ARM who would see their position as the designer of the majority of used chips in the World reduced to an in house silicon engineering design office. Would push competitors into the Intel camp too.
Apple might want to prevent it falling into another company’s hands but then why did it sell the shares it had which effectively prevented that. If there is anything in this most likely they are trying to negotiate some sort of deal that would either prevent that from happening (protecting Apple technology) or would give them first choice to bid should such a scenario arise.
By the way it was set up as ‘Acorn Risc Machines’ and changed to ‘Advanced’ when Apple made their investment. The company came out of Acorns research labs when the parent company folded.
@spyinthesky
I think the sell off of the ARM shares were more to do with propping up the balance sheet at a time when Apple was haemorrhaging money.
Well steve did say Apple should THINK BIG in using its cash stockpile. Although it would seem on the surface it would piss off Intel, I think Intel would be happier with an Apple owned ARM than an independent one.
@C1 …funny girl…giggle, giggle!
Apple could not “cut off” its competitors. Those licensing deals are already signed and most if not all ARM processors are made by licensees like Samsung not ARM itself. Apple would however control the technology and be able to keep the best stuff for themselves.
Of course buying AMD would give the Global Foundries and a place to build there own chips.
Apple, buying the tech industry one company at a time … in alphabetical order no less. (I guess Zilog has a long wait)
@TRRosen
I hope you are right… but they could decide to stop developing ARM technology entirely and produce new technology, which would require new licensing.. I’m sure they are “evil” enough to even consider this (they hate competition and love the money!)
I think it makes sense. Apple buys ARM. Present licensees of ARM technology continue getting what they contracted for and Apple now gets paid for that. BUT… the newer, more advanced designs would now go into Apple’s products first, and when that technology starts getting a little old they can then license that out to their competitors (if they’re still interested). Anyone who doesn’t want to play in that sandbox can go to Intel, which would put them at an even more disadvantage considering Intel’s current offerings in the mobile space.
And C1, no one knows for sure that the A4 is an ARM design. The chip size seems too big for that for one thing. I hold the belief that the A4 is a Power chip emulating ARM, at least until the next major revision of the iPad’s OS. After all, that’s what the PA Semi people were good at, making micro-power Power chips.
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It is not illegal to be a monopoly. It is illegal to abuse the power.
As long as they don’t have to pay an Arm and a Leg.
I still believe that NVidia would be a good acquisition for Apple. Perhaps ARM and NVidia together? Along with P.A. Semi, that would form quite a technological base.
Sorry
No way Apple could takeover ARM and cease distribution to other competitors. The move would be blocked by both European and American anti trust bodies. Never happen, Apple would have to pledge to or actually license the technology to others to insure competition.
The entire story is made up by analysts. They want to speculate on how Apple should spend the 41+ billion. Same old crap; wall street wants their cut.
@TowerTone
Lol, good one. I knew there was a reason I’m still reading MDN.
So, if there are ARM processors in Apple’s competitors’ devices, why not make money off of them.
Meanwhile, Apple uses THOSE profits for R&D;of Apple-specific/Apple ONLY processors. It’ll give those ex-PA semi people something worthwhile to work on.
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It all looks good on paper.
I think the main reason to buy ARM is to keep ARM’s patent portfolio from being bought by Google.
Apple does not need ARM to design chips. They can do it internally already. However, they do need to license ARM patents.
If Apple does not buy ARM for $2 – 5 billion, someone else will.
That would greatly hurt Apple if the license fees go up, OR, the new owner mandates knowledge of how the technology will be used as part of the license.
just my 2 cents…
Apple buying ARM could bring up monopoly issues given their dominance of the MP3 player market and their rising strength in mobile phones.
In my view Apple will only buy companies that allow them to develop new and interesting stuff. We don’t exactly know who designed the A4 chip but the PA semi group probably were involved in it. The new iAD feature in iPhone OS4 is obviously directly from the mobile ad company they bought.
AMD are Fabless, are they not?
@ noso
Yes and no. All of AMDs fabs are now a separate company called Global Foundries. Which AMD wholly owns.