ARM stock rises 25%, Apple bid rumours resurface | Hacker News Reader

ARM stock rises 25%, Apple bid rumours resurface

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31 pointswlievens29 comments

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...

Another report http://www.marketwatch.com/story/arm-holdings-imagination-te... 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

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

> 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?

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.

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.

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

A4 is ARM based

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)

ARM dominates, yes. BTW: the other company mentioned is also a fabless core designer: Imagination Technologies. They are a bit lower-end than ARM, but disruption tends to come from below...

They have some cool ideas for customized many-core, with a mix of CPU and DSP. My hunch has been that that's where Moore's Law will go: specialized silicon (like specialized organs in your body; or specialized firms in the economy.)

A more innocent explanation could be that Apple really believes in the ARM platform's continued success and thinks it's a good investment. Good way to hedge their bets. You can buy an iPhone and give them a big profit margin or you can buy an Android phone and give them the 30-50 cents ARM license fee.

Very highly unlikely. Apple only has to pay $0.33 licensing fees for every A4 processor it sells. This cost is so close to zero the saying "why buy the cow when the milk is free?" should apply here.

Not only that, the antitrust concerns would tie Apple up in court for years. This would be like Microsoft buying Intel in the middle of the DOJ investigation. Not gonna happen.

How is this different than Apple buying PA Semi?

Also, Apple's not a monopoly.

PA Semi gave them specific IP and engineers for low-power chip design. ARM already licenses its IP and designs for a very low price. At best, I could see Apple buying a minority percentage like they used to own just to keep someone else from messing with them.

PA Semi doesn't make chips used by all of the top smartphone vendors.

Apple isn't a monopoly, but there are still antitrust concerns when you buy a company that all of your competitors must license from.

> so you can appreciate the percentage increase by eye.

Not quite what you asked for, but Settings -> Vertical Scale -> Logarithmic -- one pixel is the same percentage change no matter the absolute price.

Hey, nice point. You still need something to compare it to though, to know the actual percentage. But it would show anomalous changes,

Imagination Technologies makes the PowerVR graphic accelerator used in some of the ARM-based SoCs like OMAP (and allegedly the Apple A4).

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.

I think #1 would take a long time. ARM has an x86-esque foothold on mobile devices. Apple would have to do some straight up awful things to get people to move off of ARM. Apple is smarter than that. Instead, if this happens, it will be a slow boiling.

I agree on #2 though, it doesn't make as much sense for Apple. This would sort of be diametrically opposed to the quite successful decision to use Intel CPUs.

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

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.

"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?

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.

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...

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.

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.

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...

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

Too good to be true.

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