Why Apple might want to buy ARM
--- Last January, Apple COO Tim Cook stated, "We believe we need to own and control the primary technologies behind the products we make." That motivation, backed by Apple's 41 billion cash on hand, makes its rumored acquisition of ARM Holdings so compelling. ---
What would you do if you had $41.7 billion in cash reserves? That's what Apple has and, as Ken posted earlier, the rumor du jour suggests the company might use a modestly large chunk of it to acquire ARM Holdings. If such a deal is in the works, it would be Apple's largest purchase ever by an order of magnitude; the suggested £5.2 billion (US$8 billion) sticker price dwarfs the biggest prior buyout, which brought NeXT into Apple for $400 million and delivered the foundations for Mac OS X (along with a certain iCEO).
ARM licenses its chips to many consumer electronics heavyweights; in addition to powering the iPad and iPhone, ARM processors power other smartphones, including those running on the Symbian, Windows Mobile/Windows Phone 7, and yes, Android operating systems. An Apple acquisition of ARM, therefore, could have far-reaching implications on consumer electronics, especially when it comes to competitive access to the latest and greatest ARM chips.
In the London Evening Standard article, a trader was quoted as saying "A deal would make a lot of sense for Apple .... That way, they could stop ARM's technology from ending up in everyone else's computers and gadgets." That may be taking it a bit far -- ARM's licensing and product lineup couldn't be made completely private in the short term -- but it would make Apple the most-favored customer for ARM's designs. It would also help Apple's other recent buyout, chip shop Intrinsity, make the most of its expertise.
Back in January 2009, Apple COO Tim Cook stated, "We believe we need to own and control the primary technologies behind the products we make." As the processor plays a pivotal role in shaping the user experience on mobile devices (think performance and power consumption) an acquisition of ARM could provide Apple the ability to better integrate and leverage ARM technologies in order to stay ahead and differentiate from the competition. The A4 chip in the iPad is based on an ARM design, which was first whispered about almost two years ago.
In the last two years, Apple has made several notable acquisitions: of semiconductor company P.A. Semi, mapping company Placebase, music streaming service Lala, and mobile ad firm Quattro Wireless. So far, the Quattro Wireless acquisition has produced the most visible results, in the form of iAds. If an ARM acquisition is indeed happening, it'll be fascinating to see what comes out of it.
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--- Last January, Apple COO Tim Cook stated, "We believe we need to own and control the primary technologies behind the products we make."...
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And thats why you always leave a note.
April 22 2010 at 5:34 PM Report abuse Permalink rate up rate down ReplyApple should definitely pick up more on the processor side if they do intend to truly focus on the consumer electronics space. However, if they are going to do that - they need to look at picking up Palm as well because many of the patents in that area are owned by Palm.
April 22 2010 at 1:04 PM Report abuse Permalink rate up rate down Reply"What would you do if you had $41.7 billion in cash reserves?"
You should BUY ADOBE and fix it.
If Apple bought Adobe, they'd have to remake already existing and monolithic products.
Instead of doing that, Apple should take the chance to develop applications using modern Cocoa development practices and build equivalent photo manipulation/raster image editing and a vector image editing application suite.
This would be great!
Alas, Apple doesn't have the balls to do this. This type of editing is much more entrenched on computers than video editing was when Apple bought FinalCut from Macromedia more than a decade ago.
One can still hope.
You assume that what is wrong with Adobe is its raster and vector image programs. The broke part is elsewhere.
April 23 2010 at 2:13 AM Report abuse Permalink rate up rate down Reply''And that's why you always leave a note''
I bet the new ARM chips could really help them optimize the already amazing battery life on the iPad. Sadly, I've yet to experience it since:
http://MyWifeSaidNo.com
We've got your back, Craig...
http://www.tuaw.com/2010/04/20/peace-in-the-home-sharing-an-ipad-with-your-spouse/
It would be a disaster if Apple gained control of ARM technology and used it to squeeze out competitors--bad for Apple, and bad for us. But there's no need to worry--ARM doesn't have that degree of control over the ARM CPU. There's a reason why the A8 Cortex isn't called the ARM 8 Cortex.
April 22 2010 at 11:14 AM Report abuse Permalink rate up rate down ReplyAll Apple has to do is to purchase 51% of Arm.
It doesn't have to purchase all of Arm.
This reduces the cost to $4 Billion - a very cheap investment for Apple.
By buying a controlling interest in Arm, Apple insures itself of having the latest in chip technology from Arm.
It also prevents any Apple competitor from controlling Apple's future by buying Arm.
And it allows Arm to still sell to licenses to Arm's products to other companies. This prevents Apple from monopolizing the cellphone CPU business and from being accused of unfair practices.
Simple.
Apple would both own the Arm technology and Arm would remain free to do business with others - such as Google Android, etc.
This is the best of both worlds.
Can someone clear up why the article says the A4 chip is ARM technology and yet Apple touted the A4 as their own design? I'm not clear on this. And I thought I read somewhere that the PA Semi acquisition is what brought in the A4.
"And that's why you don't yell."
April 22 2010 at 10:18 AM Report abuse Permalink rate up rate down Reply:D
Arrested Development
Wow - the first thought I had was that TUAW - especially for being a Mac blog - doesn't have any competent graphic designers like its sister Engadget.
Even with the AD reference, that's still a poorly-done image - like pretty much every image we see on TUAW that isn't an icon.
I'd be very surprised if they acquired ARM. ARM's IP is good but not all that unique, and ARM customers can heavily customize the ARM designs anyway. Acquiring the company would not give Apple substantial additional flexibility. It wouldn't lower their parts cost all that much either (ARM doesn't actually manufacture), but it would add a lower-margin branch to their business.
It would make (slightly) more sense for them to acquire a LCD panel manufacturer, but I don't see that happening either.
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TUAW (or The Unofficial Apple Weblog) is a website devoted to tips, reviews, news, analysis and opinion on everything Apple.
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