Apple to acquire ARM? | Hacker News Reader

Apple to acquire ARM?

theregister.co.uk

73 pointsfrofro41 comments

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)

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...

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.

It seems to me you've just articulated a fairly powerful argument against this happening.

I'm having a hard time seeing what an acquisition would accomplish for Apple that a nice fat contract could not for much cheaper. It's not as if chip manufacturers tell customers the size of Apple to just get lost if they need a custom chip for some purpose. A "nice fat contract" negotiation would look somewhat similar to acquisition negotiations for rumor mill purposes, too.

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.

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.

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.

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.

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).

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.

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.

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).

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...)

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.

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)

> Antitrust problems generally happen when you coerce a company into something using your monopoly power

So Microsoft buying Intel wouldn't generate antitrust problems?

Microsoft is a special case because of their previous antitrust problems. I'm sure it would be investigated, and with a merger of companies that big I suspect lobbying and politics will have as much effect as the law itself.

But at a very superficial level: MS & Intel are in different markets, so there is no obvious objection.

IANAL etc etc

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).

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.

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

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

they have 40+ billion in cash. theyre saving it up for something huge (my own beliefs and from what theyve hinted at). Nvidia or AMD/ATI could be it.

IMO ARM would be better choice compared to Intel/AMD/NVIDIA, etc. as Apple is getting into more portables...

But I wish they would buy Foxconn, so that they can control manufacturing too!

If they owned Foxconn they would own all the human rights troubles too. Contractors provide a necessary distance and deniability.

Admittedly I thought that AMD made more sense initially but I think the key might be that Apple isn't really a "computer company" anymore. Laptop and desktop sales aren't nearly as important as iphone, ipod and ipad sales. With that buying AMD may not be as enticing as ARM as there may be more of a future in the small devices. Not sure on the numbers but I would also imagine the margins are much better on the small devices. Small devices are also generally more tightly integrated than laptops/desktops so owning the stack may be advantageous.

With that in mind, why buy ARM? Why not buy something new and really innovate.

We're at the point where there's only one platform that isn't doing multi-architecture development, and even Microsoft has Windows CE / Mobile running on ARM and x86.

With the way things are going, it's conceivable you could see mobiles running MIPS, Power, and half a dozen other technologies. Apple could lead the way if they bought up a couple smaller companies.

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

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).

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

While probably true, they get ATI for free (from the AMD purchase :-)

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

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.

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

Is said register accessible online?

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.

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.

Now this could be interesting.

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.

> 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.

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?

Such a brilliant move it could be!

Time to fund chip-design startups? =)

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).

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