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