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    Home Apple
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    Apple ARM Deal Is Shot Down, Again

    Written by

    Michelle Maisto
    Published April 27, 2010
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      Apple’s rumored interest in purchasing ARM Holdings – a leading semiconductor company and holder of much microprocessor IP (intellectual property) – is the subject of an April 26 statement from iSuppli. In addition to offering up data on ARM, iSuppli seconds the opinion that there’s no need for an acquisition by Apple.
      Though truly, there wasn’t supposed to be need for a second opinion. On April 22, ARM CEO Warren East worked to quiet such rumors by presenting the situation rationally.
      “Exciting though it is to have the share price pushed up by these rumors,” East told the Guardian, “common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology. Nobody has to buy the company.”
      With this, iSuppli director and principal analyst William Kidd agreed.
      “Just because ARM’s IP plays an important role in mobile devices, that doesn’t necessarily mean ARM is of strategic value to Apple,” Kidd said in the statement. “iSuppli thinks ARM would represent a costly acquisition with little in the way of true strategic benefits. The acquisition would not give Apple’s products a competitive edge/differentiating value.”
      How costly an acquisition it would be isn’t clear, though iSuppli, quoting ARM estimates, says a semiconductor company would need to spend between $50 million and $150 million a year to reproduce what ARM does.
      “iSuppli also doesn’t buy into prevailing speculation that there could be significant value in denying other competitors access to ARM’s IP, since the majority of the impact would be felt by companies like Broadcom, Samsung and Texas Instruments, which are not exactly Apple’s biggest rivals,” Kidd added. “In any case, there would be no visible end-market impact seen for two years at a minimum.”
      ARM’s IP is an important component in Apple’s iPhone, iPod touch and iPad, as well as in the devices of rival manufacturers. For this reason, too, said Kidd, an acquisition is unlikely.
      “Many major semiconductor companies already have long and broad use of current ARM technology, and we suspect that their business engagement with ARM allows for future access as well,” said Kidd.
      He added, “If you take this theory out further, it would be problematic for chipmakers to stop using ARM, not just because of their reliance on an ARM-designed microprocessors per se, but because redesigning the software/firmware of some baseband designs would be very time consuming and disruptive. We speculate that other ARM bidders could come out-but only if Apple truly emerges as a bidder.”
      What started the rumor isn’t certain, but iSuppli notes that the timing is at least interesting, coinciding with Google’s announcement of its “IP-driven acquisition” of Agnilux. The start-up was reportedly created by employees of P.A. Semi who left that company when Apple purchased it in 2008.
      Apple and P.A. Semi additionally made headlines earlier in April, when The Korea Times reported that Apple – and not Samsung – was expected to make the application processors in Apple’s upcoming 4G iPhones. The expectation was that, in house, P.A. Semi would be tasked with producing the APs.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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