Rumor: Apple to Consider Acquisition of ARM
Posted in: Apple, arm, iPhone, mobile, Phones, processors, rumors, Today's ChiliApple is rumored to be considering a bid for ARM, the British company that designs the processors found in some smartphones including the iPhone, according to The London Evening Standard.
ARM’s share prices soared to an eight-year high on Wednesday as a result of the rumor, but ARM chief executive Warren East today told The Guardian that there was no necessity for the company, whose market capitalization stands at $4.6 billion, to be acquired.
“Exciting though it is to have the share price pushed up by these rumors, common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology,” East told the Guardian. “Nobody has to buy the company.”
However, that statement does not deny the rumor, as some publications have suggested. Companies sometimes use statements provided to the press to talk tough and indirectly negotiate with potential buyers, using ambiguous statements such as East’s.
The takeover offer is rumored to be in the $8 billion range, which would be 20 percent of Apple’s $41.7 billion cash reserves, as MacRumors’ Arnold Kim points out.
The benefits of such a buyout are, however, questionable. Some suggest Apple could acquire ARM to shut out competitors wishing to use the processor, but that wouldn’t prevent them from using mobile processors from other companies. Also, Apple purchased chipmaker PA Semi in April 2008, and Steve Jobs has said the purpose of that buyout was to make system-on chips for mobile devices.
“PA Semi is going to do system-on-chips for iPhones and iPods,” Jobs told NY Times in June 2008.
(A teardown of the iPad, however, reveals Apple is still using an ARM-designed processor.)
Also, Apple is ARM’s biggest customer, and ARM pockets royalties for every iPhone and iPad sold, as well as other mobile devices using ARM chips. Given those facts, an ARM acquistion does seem unnecessary indeed.
City aflame with takeover talk of ARM and Xtrata [London Evening Standard]
See Also:
- Rumor: iPad’s A4 Chip Was Outsourced
- iPad Dissection Reveals Its Secret Powers
- Development of Apple’s iPad Chip Estimated at $1B
Photo of a DIY digital clock equipped with an ARM processor: htomari/Flickr