Apple Could Buy ARM, But It's Not Going To

Heard the latest? The stock world is abuzz over the rumor that Apple might purchase ARM Semiconductor. The rumor apparently began in London and was fueled by the combination of Apple's recent spectacular quarter and the fact that English accents sound so darn sophisticated. The train of
logic goes something like this:
  • Apple has built its own custom SoC (the iPad's A4)
  • Apple had a great quarter
  • ARM is the industry leader when it comes to designing low power processors for handheld devices
  • Apple will buy ARM

British Investors: Ruining your carpet since 1895

This ironclad reasoning has boosted ARM's share price a respectable five percent, from $14.87 at the market's open Thursday morning to $15.63 as of 1 PM today. Upwards of five million stock shares have been traded in the past 24 hours; even the idea that Steve Jobs might want your company is enough to get investors salivating these days.

It's an interesting idea, but ARM's own CEO, Warren East, evidently thinks it's unlikely to happen. "Exciting though it is to have the share price pushed up by these rumours, common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology," Warren said. "Nobody has to buy the company."

Given Apple's love of secrecy that's exactly what you'd expect ARM to say, but in this case East has a point. An Apple acquisition would be a logistical, legal, and possibly even a regulatory nightmare. Right now, ARM is a neutral company that designs microprocessors. Dozens of companies, including NVIDIA, Qualcomm, Samsung, and Texas Instruments, license ARM's processor architectures and build products that compete against each other.

If Apple bought ARM it would throw the entire arrangement into disarray. No matter how open Apple pledged to be, there's no getting around the fact that it would be designing the chips its competitors' used. Even if the company kept all current licenses intact, OEMs would be forever worried that Apple might surprise them with license changes or better CPUs it designed for its own personal use. It's not as if the company has a problem changing license agreements at the drop of a hat, after all.

East is right when he says the idea doesn't make much sense. Analysis of the A4 has revealed that it's almost certainly an ARM Cortex A8 built by Samsung on 45nm technology (the iPhone 3GS CPU is a 65nm processor). When Apple went to the trouble of customizing their own processor by purchasing PA Semi, they apparently did so to trim off needless blocks of I/O their chip didn't need and thus save power. There's no reason this arrangement can't continue; ARM's licensing terms explicitly allow its customers to attach or detach whatever additional control logic hardware they need.

It wouldn't surprise us if Steve did opt to design his own chip architecture, but it would be a complex, multi-year effort that would almost certainly need to be revised several times before it clearly surpassed ARM's existing designs. Until such time as this occurs, Apple can get everything it wants from ARM already, minus an enormous amount of hassle.
infinityzen 4 years ago

Buying Arm would force Apple out of most of the markets that use Arm processors. Otherwise they would catch just about every kind of hell from regulatory bodies and get very poor return on their investment with everyone jumping to a competing platform like MIPS.

mrbrownsound 4 years ago

So basically all hell would break loose if Apple does acquired ARM and takes advantage of it's resources to improve only apple products, causing other device manufacturers to rely on other providers...ah limiting us the consumer from getting our goodies. Be smart Apple and just sit back and share with everybody else.

blazarcher 4 years ago

Well if I were Apple, I'd definitely take advantage and take a hold of ARM. Getting rid of the competition and making "my" company a monopoly..

infinityzen 4 years ago

That is just it though, it is not Apples choice. Before one company can buy/merge with another company they need permission from the government. I really don't see this happening.

fpugsley 4 years ago

Apple's software is remarkably portable. Buying a CPU company doesn't make sense...

animatortom 4 years ago

That would be good if they did. Then they would have a power to bring some manufacturing jobs here to the states. Then maybe he could give back a little that he has taken for so long! Of course Jobs doesn't care about the economy, just what gets him more turtlenecks.

I am sure when this was brought up. Obi Wan said to him,(hand wave)..... This is not the Acorn you are looking for!

3vi1 4 years ago

>> Then they would have a power to bring some manufacturing jobs here to the states.

ARM only designs and licenses CPUs, they don't manufacture them.

I'm kind of glad Apple's not buying them, because I see them as future competition for the x86 architecture in the desktop space (and think Apple might change that direction). I believe the result will be less reliance on a CPU-level API and more competition/innovation once that lock is broken.

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