

Apple to acquire ARM? - frofro
http://www.theregister.co.uk/2010/04/21/apple_arm_acquisition_rumor/

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nl
It would be unusual for Apple to spend that amount of money to essentially
shut down a company. ARM makes all their money from licencing their designs,
so this rumor is saying they will close down their income stream and turn them
into an in-house chip design company.

It would take a while for this to have any effect anyway, because I suspect
that most ARM manufactures have licence agreements that protect the upcoming
Cortex-A9 designs (NVidia Tegra 2, TI OMAP4 etc). The Cortex-A9 should be good
enough for a couple of years.

Longer term, there are good alternatives to ARM around anyway. Atom is making
good progress, and Loongson (<http://en.wikipedia.org/wiki/Loongson>) could be
an option too. (The idea that Loongson could come to dominate the market is so
ironic that I think Shakespeare would rise from his grave and write a play
about it)

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noelwelsh
Buying ARM to stop its cores getting to competitors doesn't seem a good idea.
Other chip manufacturers would rush to fill that vacuum. Freescale and the
other Power ISA guys would love that kind of boost. I don't see it slowing
down Android significantly. GCC will recompile to whatever other platform is
chosen; there will be some porting effort but it isn't huge.

If Apple is really doing this I see it a play to take on Intel. The ARM
instruction set is clean and well-designed, unlike Intel's. This enables ARM
chips to draw significantly less power for the same performance. Now, who
cares about performance-per-Watt? Anyone who has a cluster does. Anyone
building devices that run on a battery does. These two groups are becoming
everyone -- it's laptops/tablets and cloud computing all the way, baby. If ARM
gets a 64-bit implementation and a fast floating point unit it can compete
against Intel in the server market. Apple can fund that with their giant pile
of cash. ARM already has the low end market sewn up. Imagine a laptop with 10
hours battery life and Google buying a million 64-bit ARM cores. That's two
nice revenue streams to have, and it gets Apple into a big market where they
currently have very little presence.

I did a blog post about some of these issues here:
[http://www.untyped.com/untyping/2010/02/02/is-the-ipad-
the-b...](http://www.untyped.com/untyping/2010/02/02/is-the-ipad-the-
beginning-of-the-end-for-intel/)

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buster
That'd be a disaster. ARM is running pretty much in everything portable. I
don't want to see that in Steves hands!

Ironically, if the worst happens (Apple buying ARM, shutting down licensing),
Android would become even more the competition as it is already running on
Atom and quite portable to other architectures. Intel would lose a major
competitor, too.

~~~
pohl
I agree that shutting down licensing would be bad. What I don't understand is
why someone would pay billions for a company only to shut off its revenue
stream. That's a pretty bizarre scenario.

~~~
buster
I don't think it's unusual that companies are bought and shutdown to get rid
of competition.

When Palm will be bought, i think the resulting company won't build
smartphones anymore (the revenue stream) but will only be bought because of
Palms patents.

I don't really think this will actually happen, but if Apple buys ARM, it
would basically have power over the whole mobile phone market (plus settop
boxes, receivers, TVs and almost every other embedded system). It would put
the competition to a serious disadvantage for years (until competition is able
to switch to a new platform).

Even just owning a core technology like ARM has, in the hands of one company,
cannot be good for competition, the market and the customer in any way.

But as i said, i actually don't believe that Apple will buy ARM. That day, i
will lose all the last hope i have in the regulation of the market.

~~~
pohl
Still sounds like crazy talk to me. I think it's much more likely that Apple
would just want to make sure that the CPU roadmap was going in the direction
of their designs.

They have a history of participation in the AIM alliance. The Altivec
instruction set is practically their baby. The reason they had to switch to
x86 is because neither supplier (Motorola nor IBM) was willing to target the
performance-per-watt that Apple needed to execute their laptop designs. If
there is any truth to this rumor, I would guess it has to do with securing the
roadmap so they don't get blindsided by suppliers in the future. That makes
much more sense to me than blowing 8 billion dollars to scuttle competitors.

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chipsy
I'm with the camp that doesn't see an obvious strategic move here.

Acquiring ARM only for the chance at an end-to-end vertically integrated
design seems quite expensive, albeit not beyond the "insanely great"
motivations of Mr. Jobs.

It's true that ARM has a compelling and growing market share at the lower end,
but continuing the licensing business seems un-Apple-like; at the same time,
shutting that business down would only hurt competitors a little - it would
mainly serve to make the other CPU makers rush in and try to capture the
resulting power vacuum.

~~~
argv_empty
_Acquiring ARM only for the chance at an end-to-end vertically integrated
design seems quite expensive, albeit not beyond the "insanely great"
motivations of Mr. Jobs._

Not beyond? I'd take that a step further and say that end-to-end vertically
integrated design is very much a Steve Jobs sort of thing to attempt. He has
said he thinks of Apple as a software company and, attributing it to Alan Kay,
that "People that love software want to build their own hardware." That said,
I'm not sure this would require total ownership of ARM -- just sufficiently
large stake in it to exert some direction on its future development (sort of
like sharing PowerPC with IBM and Motorola).

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jsz0
I don't believe Apple is dumb enough to buy ARM as part of a grand anti-
competitive scheme. Even if that was their intent it wouldn't work legally or
technically. If Apple wants to expand their chip designs for their own use, or
to sell OEM, they don't need to buy ARM. An ARM license will do and it costs
considerably less than $8B. That leads me to believe Apple wants someone to
think they're interested in ARM. Kind of makes me think about the AdMob deal
and how strange it was Apple just let the clock run out on that deal, quickly
turns around and buys another company, and has a unique platform on the market
<6 months later. Just makes you wonder if they ever had any real interest in
AdMob or just wanted to force Google's hand on it.

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Daishiman
This would scream antitrust. ARM chips represent something like 90% of all
CPUs in existence; billions of cores manufactures every year by different
fabs. I'm not sure it would be allowed to go through.

~~~
nl
1) ARM doesn't manufacture any chips. They licence their designs to chip
makers. That means they are in the chip design market, and there is no way
they have a monopoly there, so I find it extremely unlikely that the takeover
would be blocked on those grounds.

2) Antitrust problems generally happen when you coerce a company into
something using your monopoly power - not when you close down a business (if
you believe the bit about them closing ARM down - which I don't). If Apple
tried to force ARM licencees to forbid the use of Android (or Flash! :)) on
the chips, then _maybe_ there would be a concern (abuse of market power etc).

~~~
gonzo
They don't have to 'force' it, they just have to make it very expensive.

ARM has a three-tier licensing model ([http://www.arm.com/products/buying-
guide/licensing/index.php...](http://www.arm.com/products/buying-
guide/licensing/index.php>))

If you believe the wikipedia entry on ARM licensing costs,
(<http://en.wikipedia.org/wiki/ARM_architecture#ARM_licensees>), then the
average cost (in 2006) was $0.11 per core, averaged across all cores.

At at 50M iPhones, thats $5.5M (USD). Even if Apple is paying $2/core in
licensing costs (effective, the A4 is the first non-Samsung part used by
iPhone OS), thats still $100M, so $8B doesn't pencil out.

I do find it incredibly likely though that Apple would 'buy out' their
license(s), and negotiate to have a minimal (maybe even zero) cost license to
all future ARM IP.

Or they could just buy a controlling interest (probably wouldn't take 51%) and
frighten off everyone who competes with Apple.

Just the slow-down for the rest of the market alone (Atom isn't anywhere close
to ARM in terms of functionality/watt), it might be worth it.

~~~
nl
I don't disagree with your point, except this:

 _Just the slow-down for the rest of the market alone (Atom isn't anywhere
close to ARM in terms of functionality/watt), it might be worth it._

ARM licencees already have next-gen (Cortex-A9; ie: Tegra-2 etc) chips coming
this year. Any slow down in new designs from ARM won't effect the market for a
couple of years as these chips are much faster than the current designs
(Cortex-A8; ie: Snapdragon, TI OMAP 3000, Apple A4)

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pavlov
ARM is a British company. The EU Competition Commissioner wouldn't allow this
sale to go through because it would threaten European interests (i.e. those of
Ericsson, Nokia, etc).

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ahi
Didn't Apple finish dumping the last of their ARM stock a few years ago? I
recall it getting them through their bad times. It doesn't make much sense to
me. They already have a ARM licensed design firm or two. They don't need ARM
to get their custom chips.

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martythemaniak
Apple seems to be everyone's emeny right now. I guess this adds Intel (with
their new low power chips) to the list.

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samratjp
They might as well buy AMD while they're at it
([http://www.google.com/finance?client=ob&q=NYSE:AMD](http://www.google.com/finance?client=ob&q=NYSE:AMD)).

~~~
aheilbut
and they'd still have cash left over to pick up NVIDIA too.

~~~
tvon
It might make more sense to skip AMD and just get NVIDIA. It would put them in
an interesting position with Intel and Tegra seems like some hot tech these
days (at least based on the headlines I skim it does).

~~~
samratjp
I concur :-) Apple will be more likely to buy a company that will reduce a hop
on their supply chain; in that sense, a GPU maker makes sense.

But it is funny to speculate as a laymen - I mean what if Google bought AMD
instead? That would give them a crazy position to experiment with hardware and
keep a check on Apple - after all, Google means serious business with the
Nexus one and the mythical tablet. And we all know Google likes to experiment
with 3D stuff in browsers and such. Again, I am just blithering- with Google's
purchase of AMD (+ATI), they might just have crazy nice open-source 3D tools,
maybe even a cloud platform for map-reduce rendering work (take that Pixar -
yet another Steve Jobs production).

But on the other hand, Microsoft is the one who could benefit the most from
buying AMD. For one thing, MSFT gets ATI for Xbox 360, a platform that MSFT
has well executed. And now, Microsoft even make their own chips from win 7
mobile phones to consoles. To really keep Apple's market cap away from them,
MSFT panics and makes their own hardware and opens up retail stores :-P

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inffcs00
It seems Apple already holds some kind of ownership over ARM. From ARM
Wikipedia page:

The Company was founded in November 1990 as Advanced RISC Machines Ltd and
structured as a joint venture between Acorn Computers, Apple Inc and VLSI
Technology

~~~
wlievens
That means Apple was an initial investor, so it held stock in ARM. Somebody
here posted that Apple sold its stock years ago, though.

Related question: is there actually public information on who are the major
stockholders of a publically traded corporation? I'd love to see that.

~~~
timthorn
In the UK, all public companies (except those threatened by animal right
extremists) must maintain a public register of all shareholders.

~~~
wlievens
Is said register accessible online?

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rbanffy
I wonder how many patents protect the ARM ISA.

Because it's not the ARM implementation we depend on - it's compatibility with
its instruction set.

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vannevar
Apple buying ARM doesn't make much sense. Apple taking a large stake in ARM as
a diversification move to offset the risk of a decline in sales, on the other
hand, might make sense. Some other commenters have noted that Apple's original
stake in ARM helped their balance sheet before in the 90s, maybe they're
looking to repeat history if there's a downturn.

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mishmash
Now this could be interesting.

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tdmackey
Don't really know what apple is up to, but watch the 4 hours on the London
Stock Exchange before NASDAQ early hours opens and if it's happy buy a lot of
ARMH.

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alexkay
> they could stop ARM's technology from ending up in everyone else's computers
> and gadgets

I really hope the acquisition won't get through, I can see Apple doing just
that.

~~~
timthorn
Of course, Apple used to own a sizeable chunk of ARM.

But it doesn't make sense - Apple can't stop the existing licensees from
stopping producing their chips, and the companies with architecture licenses
will still be able to make new, compatible designs to sell to third parties.
What it might do is stop innovation in the ARM ISA being made available to
other companies, but that's a very long term thing; a new ISA takes many years
to get to product silicon.

The whole ARM business model is based around sharing the costs of development
(which are substantial) with a large group of companies. Could Apple really
justify sustaining that cost to prevent competitors from using future ARM
designs, when there are (albeit perhaps inferior) alternatives?

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c00p3r
Such a brilliant move it could be!

Time to fund chip-design startups? =)

~~~
wlievens
One of the chip-design startup exit strategies has long been "getting acquired
by ARM", actually. Quite some acquisitions happened during my time at ARM (4
years).

