How Steve Jobs saved Apple’s bacon with an outstretched ARM

“The chip designers at ARM Holdings have turned the computing world upside down, shaken Intel to its core, pulled AMD into its orbit, and broadened its range beyond mobile into every nook and cranny of the digital world, from toys to servers,” Rik Myslewski writes for The Register. “But where did this UK wonder company come from? How does it earn its living? And how did Apple help create the company that helped Steve Jobs save Cupertino from annihilation?”

“At the recent ARM TechCon developers conference, ARM’s training and education manager Chris Shore answered those questions and more,” Myslewski writes. “ARM’s first CEO was Robin Saxby, who wasn’t the founder of the company, but instead had been headhunted by the founders to run the show. Smart move, seeing as how Saxby came up with the licensing business model that has turned ARM into a global powerhouse. That business model was born partly out of necessity. With only 12 employees, it didn’t have the resources to turn its chips designs into products.”

“Those resources, by the way, were provided by ARM’s first funders: Apple, Acorn, and VLSI,” Myslewski writes. “When Jobs returned to Apple and shortly took control of the company in the late ’90s, Apple was in dire straits financially. As part of the turnaround that he helped engineer, Jobs raised a boatload of cash, Shore said, ‘by selling Apple’s stock holding in ARM, which was worth a considerable amount of money. So arguably we’ve outlived two of our parents and saved the life of the third.'”

Much more in the full article here.


  1. From ARM’s training and education manager Chris Shore regarding Apple’s 64bit A7 processor: “They’d done that incredibly secretly and ended up stealing a march on the whole of the rest of the industry. It was quite a staggering achievement, to be honest.” Take that all you naysayers about Apple no longer being able to innovate!

      1. Dab2:

        it is true that Jobs sold off the ARM holdings that Apple had. It is not true that they sold it to bail themselves out of financial trouble. Jobs managed to show profitability in just two quarters.

        ARM holdings were sold off two years later, totaling approx.. $1.1 billion. Apple then leveraged $211 million into a stock buyback that allowed it to hold a cash position, allowing for the growth that occurred in the next five years.

        All of this occurred 3 years after Jobs returned to Apple.

  2. “by selling Apple’s stock holding in ARM, which was worth a considerable amount of money. So arguably we’ve outlived two of our parents and saved the life of the third.”

    Wrong; Apple returned to profits in just two quarters, already by summer of 2007. Jobs sold ARM’s shares with relatively small portions through many years; the last batch was sold in 2000s.

      1. In the scheme of things NOW they were trivial sales.

        At the time they were very, very significant sales. A single sale of ARM shares for $25 million pushed Apple, at the time, into the black for the quarter. This was a tiny sale by today’s standards, but made a huge difference to Apple’s creditors (and indirectly Wall Street) at the time in allowing restructuring of debt.

        The thoughts at the time were, “If Apple’s making a profit, we’ll renegotiate debt and extend credit to keep Apple afloat. If Apple’s still losing money, we’ll push for bankruptcy and take what we can get.” Thus the tiny sales that helped push them into the black each quarter (and yes, they sold ARM shares over several quarters) were critical at the time.

        Even back then I had wished that Apple could have maintained its shares in ARM. Just think of what the world would be like if Apple held a controlling share of ARM today. But it was not to be.

        1. Yes clearly that makes sense and thus the claim does stand up even if it was exaggerated for understandable effect. I too was saddened by the sale of those shares but realistically if Apple had retained a large holding I doubt that ARM would have made the impact they have today, for other customers may well have less keen to invest in their technology and Apple itself was a long way from being able to exploit it itself to any great degree. Timing is everything I guess.

  3. The part of the ARM Holdings story that MDN would never let you know is that John Sculley was responsible for Apple’s start-up investment in ARM in 1990, and the original license terms that allowed Apple to be be one of the first users of its tech – in the Newton. Of course, acknowledging Sculley’s critical role in the development and use of ARM chips would devastate MDN’s incredibly ignorant rants about how Sculley was a bozo. In fact, Sculley championed the LaserWriter, the Macintosh II, the first PowerBooks and the Newton – all important products for Apple before the “dark times.”

      1. Every single president lies, that I’m sure goes all the way back to George Washington. What is somewhat new is the level of spectacular and brazen corruption. Nixon was nowhere near as corrupt, nor as arrogant about it as Obama is. This is the reason you don’t want to have the Media in bed with the politicians. When the two are on the exact same side covering for each other, then you have an administration like the Obama one.

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