

ARM stock rises 25%, Apple bid rumours resurface - wlievens
http://www.google.com/finance?q=LON:ARM

======
10ren
I wish google finance had a setting to 0 the y-axis, so you can appreciate the
percentage increase by eye. (or is there a setting for that somewhere?)

But you're right: 17% up in 2.5 hours means there must be some news about...
(why don't you put 17% in the headline? The current title is too vague to grab
the attention it deserves - and someone here probably knows _EDIT_ much
better).

 _EDIT_ whoa. It spiked to 31% up, now settling around 25%

Seems to be rumour of apple buy:
[http://www.lse.co.uk/FinanceNews.asp?ArticleCode=hu9stjtv6kn...](http://www.lse.co.uk/FinanceNews.asp?ArticleCode=hu9stjtv6knyciy&ArticleHeadline=ARM_Holdings_jumps_bid_talk_from_Apple_supports)

Another report [http://www.marketwatch.com/story/arm-holdings-imagination-
te...](http://www.marketwatch.com/story/arm-holdings-imagination-technologies-
surge-2010-06-10) which notes a similar surge in Imagination Technologies
<http://www.google.com/finance?q=LON:IMG> whose tech is also used in " _tablet
computers_ " hmmmm... might not be apple?

 _EDIT_ sigh. now only 10% up. oh well, that was exciting for a while. Might
still happen of course.

> a spokeswoman for ARM said it had not received an approach and a takeover
> from Apple would not make sense.
> <http://www.reuters.com/article/idUSLDE63M18320100610>

~~~
wlievens
The Apple bid might be real? A simple rumour typically doesn't merit a 25%
rise.

~~~
masklinn
> The Apple bid might be real?

Feels weird. What sense would it make precisely? ARM only does basic code
design, they already have a fabless constructor or two, what would Apple gain
by buying ARM, shutting it down and making designs only for Apple themselves?

~~~
joubert
Control of the chip company that produces the silicon (design) for just about
all mobile devices?

And symbolically ARM would be folded into one of the 3 companies that created
it originally.

~~~
masklinn
Arm does _not_ produce silicon, they produce designs.

And again, what would Apple gain from that control, the right to withhold new
ARM generations from e.g. HTC? Unless the Apple execs have gotten _very_
stupid recently, they probably understand that not only would the EU and the
US regulatory agency would pay them a visit if they even initiated the move of
buying ARM, doing that kind of withholding would land them in scorching hot
water.

It's one thing to have strange practices when you're the second or third
player on the smartphone market (and basically non-existent in the wider
mobile phone market in terms of number of units), it's another one to have
anti-competitive practices when you have a monopoly on mobile chips.

And ARM most definitely has that, there are few if any other architecture for
mobile/embedded systems at all, and ARM has pretty much all of the market for
mid to top-end embedded stuff.

~~~
towndrunk
Maybe they have some nice IP and few patents that Apple would like to use
against the A4 or future chip designs.

~~~
masklinn
I'm sure they have nice IP, but the point is that IP is embedded in the
designs they produce which anybody can license, and which Apple _already_
licenses, at least in part (the A4 is based on the Cortex A8, which _is_ an
ARM-designed core)

------
Aegean
I think of it this way: Buying ARM for some billion dollars would give Apple
the advantage of having unique processors on its devices. Is this enough
justification for such an expenditure? I think it is not for a various
reasons.

1) No matter how big the Apple is, the market would create new CPU
architectures that would eat Apple's initial monopoly advantage over time.
Investments are made for long term gains, so in the long run its not a good
investment.

2) Apple can already distinguish itself from competition by its engineering,
philosophy etc. a cpu architecture is not going to make enough difference. It
would be wiser to spend money on innovation than some cpu architecture that
already exists and is beneficial to Apple.

You can probably compare this to HP buying Palm for WebOS. HP bought it for
having a strong software portfolio for its mobile devices.

The difference though is that ARM has to rely on its ecosystem (e.g. all other
partners who bundle their products with ARM cpus) to survive. It needs to be
licensed to the market. In case of WebOS, it was only used by Palm itself.

~~~
stuntmouse
What about making the purchase defensively? I.e. to keep it out of Google's
hands.

~~~
ergo98
Lots of evil has been committed under the guise of defense.

However Apple's potential here is hugely overstated. ARM licensees aren't at
the whim of ARM -- they knew to sign generous IP agreements that essentially
allow them to fork the technology. You have Apple on one side, with
essentially a unchanged A8 created by Samsung, and virtually every other tech
company on the other side -- Apple would quickly find themselves in another
PowerPC situation if they bought ARM.

Speaking of PowerPC, Intel has been showing off some very impression demos of
a smartphone powered by an Atom. Android of course is built from the ground up
to be generally processor agnostic, so it wouldn't be a huge migration.

~~~
Aegean
"However Apple's potential here is hugely overstated. ARM licensees aren't at
the whim of ARM -- they knew to sign generous IP agreements that essentially
allow them to fork the technology."

Do you mean companies like Marvell have comprehensive licenses allowing them
to design their ARM cpu at their own will?

~~~
wlievens
Almost anything you encounter is an "ARM-based" chip. I'm not knowledgeable on
hardware stuff but I do know that ARM customers are engineers that build on
the platform; it's not a plug-and-play business.

------
MarkSweep
The Google finance page now links a story saying that traders think there is
"renewed talk of bid interest from Apple".

[http://www.lse.co.uk/FinanceNews.asp?ArticleCode=hu9stjtv6kn...](http://www.lse.co.uk/FinanceNews.asp?ArticleCode=hu9stjtv6knyciy)

------
stuaxo
Eeee... hope apple doesn't buy it; I could imagine them not licensing to other
manufacturers and Steve Jobs coming out with some sort of douchie remark to
justify it which will be parroted by the hordes.

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cangrande
I'd need to look a little closer but if ARM's P/E is lower than Apple's (which
is v.high something like 15x trailing earnings, which for a billion dollar
company is high) then ARM is actually dilutive and hence value destroying, for
Apple shareholders.

I think the more relevant data point is the FTSE and DOW's bad week/month, and
traders desperate to find any good news.

Whether or not the deal strategically makes sense, Apple need to consider it's
impact on shareholders.

------
gaiusparx
Not sure what's the gain for Apple. Looks like a rumor that benefits the
speculator.

Or Apple wants ARM to also design desktop chip for its Mac? Unthinkable...

------
px
So much for the 25% gain. It has dropped considerably and is now at a 5%
increase on the day.

------
c00p3r
Too good to be true.

