ARM CEO dampens talk of Apple acquisition, says 'nobody has to buy the company'
By Donald Melanson 
posted April 22nd 2010 6:25PM
posted April 22nd 2010 6:25PM
Apple buying ARM may not seem like the likeliest of rumors, but talk of an acquisition has been enough to send ARM shares to their highest point since 2002, which has now prompted ARM CEO Warren East to comment on the matter. While he's obviously pleased to see his company's stock doing so well, East says that "common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology," adding that, "nobody has to buy the company." Of course, saying that nobody has to buy the company doesn't exactly rule out the possibility of an acquisition -- Apple or otherwise -- and, last we checked, ARM's stock was still edging up higher into positive territory, so dampening talk doesn't seem to be dampening investors' interest just yet.
Funny, because Apple was one of the founding partners of ARM Ltd. back in the early 90's. One of its first chips, the ARM 6, was used in the Apple Newton.
You do realize that apples market cap is a lot bigger than Google's
@Kwame Nkrumah
The 2010 market cap was 2.7 billion POUNDS, not dollars. According to the Motley Fool:
Market Cap $5.41B
P/E Ratio 76.73
.. plus ARM is outperforming the S&P 500 by 140%. Not bad .. certainly worth an $8B offer. However, if Apple made the play to buy ARM, it would lock out many other companies that rely on ARM IP (freescale, marvell, etc..) and cause havoc in the market. I don't think ARM's partners (and interested investors) would allow it.
Has no one entertained the idea that apple could just rake in the licensing fees and not block others from using the tech. It would probably bring in more revenue than keeping it all to themselves. I think El jobso would get a kick out of getting paid for every smartphone sold, esp with the huge growth potential in the smartphone market. Great business move if that is the plan and probably the only way the deal wouldn't be blocked.
@ummmwhat
Look at the numbers for the iPhone sales in the past quarter. Setting back all of the iPhone and iPhone OS competitors for 1-2 years while they transition to an incompatible processor would totally be worth the purchase price of ARM. ARM already trades for well over 50 times annual earnings, so the licensing fees are peanuts compared to what it would cost to acquire them.
If that deal was to go through I don't think that it would take that long before another company rises up and takes the place of ARM, the reason ARM seems to be the only capable company of doing the 1gz + chips is because everyone else is o.k with the status quo
@daguila29
Yea except for Intel :D
@soobin Ooooo, I hope this goes through! I can't wait for x86 powered smartphones! /s
@soobin
Intel used to make ARM chips but sold that division to Marvell. The Atom is in a different category than ARM chips.
I like Apple products, but Apple acquiring ARM and/or Palm would be extraordinarily bad. It would not benefit Apple customers (it's not like prices on their products would go down) and it would be very dangerous for their competitors.
If anyone is going to buy anyone it should be Google -> Palm and HTC or Motorola -> ARM. (Though Motorola has been keen to shed their IC business in recent years. Didn't they spin that off as Freescale?)
I think most people are either under the assumption that if Apple buys arm they will either A) leave it be, and let it continue producing its immensely popular IP for competitors, perhaps at a slightly higher premium and tiered release model insuring apple gets first dibs in the market. Or B) reduce ARM to just another leg (no pun) holding up the apple stronghold, insuring apple has the best mobile tech on the market and setting back its competitors by a year or more.
Honestly, I cant recall a single apple owned company that has managed to be anything even remotely resembling the current ARM model. However, you cannot deny the value of sending such a set back to apple's competitors. Apple is not in the business of licensing technology out to other companies, and if they were then its possible it might have the penetration MS has today, but that is simply not the case.
Samsung, on the other hand is in the business of licensing out technology and manufacturing components used by other companies. From an anti trust standpoint, it makes far more sense for Samsung to actually retain the licensing portions of ARM's model or atleast use ARM to a far greater potential: ie designing chips to be used in devices outside of the samsung brand. Samsung is a powerhouse in the world of technology components, making a good portion of memory used in most tech, they also make other cpu's, cmos sensors, and other controller chips.
For Samsung ARM is a nice fit, for Apple ARM is an incredibly risky and possibly rewarding move in a complex game of chess where winning only means a court date with the EU. Mark my words, if apple doesn't make a drastic change in it's current course of anti competitive practices then ARM or no ARM they wont have a leg to stand on when they pull the last straw and the dogs from the FTC come barking.
@joergonix I brought up Smasung in the original post, I didn't get crucified for it, but then again, it wasn't really "heard". Sammy is a beast, especially in sub-components, plus they actually have this type of move in their business strategy; they have a strong desire to become "the largest chip manufacturer & designer (in the mobile industry)."
someone needs to buy that man a new face. i know that much.
I work at ARM. Hope I don't have to move my commute....
@stevec6x6
NorCal >>>> Cambridge
So something else of interest here is that apple seems to be in hot pursuit of chip manufactures and IPs. The rumor of Apple and AMD courting first caught me off guard. However, AMD is another purchase or partnership Apple could handle, and could potentially be a bigger win than ARM because it could solve a lot of problems for Apple, in house chip manufacturing and designing for its entire range of products from desktops and laptops to tablets and cell phones. I am not saying this could happen, but Apple has clearly learned that by keeping as much in house as possible they can streamline things and maximize profits while increasing customer satisfaction. My point is simply that I think apple is really shopping around for a solution to keep more of its component design in house than ever before and while arm might be a nice move in that direction, it could also be just one interest that has slipped out of cupertino.
@joergonix Yeah, and if Apple buy AMD, nobody else would give a s***, because who wants AMD chips these days? 'Just like Intel, only six months later and with even higher power consumption' is hardly a winning proposition. If Apple want to buy AMD, good luck to 'em, but I can't believe they'd actually want to use AMD processors in their systems...
(Of course with the graphics chips it's a bit different.)
Yes he is saying nobody has to buy the company because somebody already did. And that grin on his face says it all, we are getting bought out by Apple man am I going to be stinking rich, maybe I will get a free iPad too. Dude a piece of advice, don't go to Vegas with this Po, Po, Po, Poker Face.
Has anyone realized that if Apple snags ARM entirely, they will have control of almost all of the mobile processor market? Of course there's always VIA as a competitor, but ARM makes up a huge base. Strategically, this would be a HUGE acquisition!