Sam OliverWarren East, chief executive of ARM, told The Guardian that he doesn't see a reason for Apple — or anyone — to pay a large sum of money to acquire ARM when they can continue to license the company's processor reference designs for much cheaper.
"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," East reportedly said. "Nobody has to buy the company."
Shares of ARM went up 3.4 percent following the rumors of an Apple acquisition. The company traded at its highest value since April 2002.
Though East's comments didn't specifically deny the rumors of an Apple acquisition, The Guardian took them as the executive's attempt to "pour cold water" on a potential purchase.
The rumor surfaced on Wednesday that Apple is interested in purchasing ARM Holdings, the company that licenses a majority of the world's mobile chip designs. Processors in Apple's iPhone, iPod touch and iPad are all based on reference designs licensed from ARM.
Apple has been a licensee of the ARM architecture for years. In 2008, the Cupertino, Calif., company purchased fabless chip designer P.A. Semi for $278 million.
And this year, Apple's first custom-built ARM processor surfaced in the iPad, in the form of the 1GHz A4 chip. Apple is also rumored to have purchased chip designer Intrinsity to help design and speed up the A4 processor, based on the Cortex A8 reference design.
Charles Martin
Christine McKee
Wesley Hilliard
Malcolm Owen
Andrew Orr
William Gallagher
Sponsored Content
103 Comments
This was exactly my question in the prior thread: what would be the synergies here for Apple to want to pay a hefty premium? It has to be far more than license fees. The CEO of ARM is exactly right when he says that there is no need "....to pay a large sum of money to acquire ARM when they can continue to license the company's processor reference designs for much cheaper."
I am still not convinced it makes sense for Apple, and have not seen any good arguments so far.
Well, not only would purchasing Arm make Apple the top dog in the mobile space, but it would give them the option to move their Mac line computers off intel processors. apple also making their own desktop class chips would position them as a very powerful entity in the personal computer world.
Well, obviously Apple -- or anyone -- has a lot more options than just 'licensing reference designs' if they own the whole company. Like giving a direction for the future that fits their strategy for example. Or putting the competition at a disadvantage by keeping the latest tech under blankets for anyone but themselves. Or jacking up licensing costs. Or use the leverage they'd have as the owner of ARM to 'get something' from other big players in the industry. Samsung, for example, is one of the major suppliers of ARM-based chips, but they have many, many more products Apple might be interested in. Or be interested in their competitors not having them.
Mr. East knows exactly how Apple would benefit from taking over ARM, and his reaction is probably naive and easy for a reason: fueling the speculation even more by not denying flat-out that there are talks between them and Apple (which I don't actually believe anyway), thereby cranking up the value of their shares even more.
I would think it would be a pretty big antitrust issue for Apple to acquire ARM and potentially cut off (or make prohibitively expensive) licensing to all others. If Google did the same, people would be screaming bloody murder.
I would think it would be a pretty big antitrust issue for Apple to acquire ARM and potentially cut off (or make prohibitively expensive) licensing to all others. If Google did the same, people would be screaming bloody murder.
Hell, ARM was started by Apple anyway. Why NOT bring them back into the fold?