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Apple reportedly closes Anobit purchase for $400M to $500M

post #1 of 42
Thread Starter 
Apple is said to have finalized its acquisition of flash memory maker Anobit, with the final price coming in between $400 million and $500 million.

Employees at Anobit were said to have been recently informed about the finalized deal, according to Hebrew-language newspaper Calcalist. The final price remains unknown, but could be as much as a half-billion dollars.

The reported goal of Apple's acquisition of Anobit is to increase the amount of memory in its portable devices, like the iPhone, iPad and MacBook Air, as well as to improve the reliability of solid-state memory.

Apple is now expected to build a development center in Haifa, where Intel, Google, Microsoft, Yahoo and Qualcomm also have facilities. The Anobit purchase is believed to be the first acquisition for Apple with Tim Cook as CEO.

Rumors of a deal between Apple and Anobit first surfaced a week ago from the same source. Anobit is a 200-employee Israeli fabless semiconductor company that specializes in flash storage, and Apple is said to be particularly interested in the company's proprietary memory signal processing technology.



Anobit has about 100 pending and granted patents, and was first founded in 2006. A $500 million purchase price would be about 7 times the $80 million it has raised in invested capital, as noted by ISI Group analyst Brian Marshall.

Apple's alleged purchase of Anobit also comes as the company is rumored to be planning to build a semiconductor development center in Israel. That facility would be Apple's first strategic development center located outside of the company's Cupertino, Calif., headquarters.
post #2 of 42
There goes forward-thinking Apple again. Great!
post #3 of 42
So, is Apple going to build its own flash storage?
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #4 of 42
Quote:
Originally Posted by rcoleman1 View Post

There goes forward-thinking Apple again. Great!

It will take hindsight to prove if this was a good idea. They can certainly afford it, though.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #5 of 42
The memory patents will be a huge thorn into the competition's sides and Apple will most certainly not license them.
post #6 of 42
Good news! Apple is getting the best cutting edge technology.

Now if a few people in the previous thread about this topic are not bald faced liars, they will immediately commence with their boycott of Apple.
post #7 of 42
Quote:
Originally Posted by Ireland View Post

So, is Apple going to build its own flash storage?

No, I believe this is about the controllers, not the memory.

And controllers are pretty important when it comes to flash storage.
post #8 of 42
Quote:
Originally Posted by Apple ][ View Post

Good news! Apple is getting the best cutting edge technology.

Now if a few people in the previous thread about this topic are not bald faced liars, they will immediately commence with their boycott of Apple.

+1. Awe hell, +100000000000000000000000000000000000000000000....
post #9 of 42
What's more, one of Apple's chief competitors--Samsung--is also an Anobit customer.

Apple can now stop Samsung and everybody else from using the technology in their devices. Apple shouldn't license the tech out to anybody else, Apple should keep it all to itself, have it exclusive only in Apple devices.
post #10 of 42
Quote:
Originally Posted by AppleInsider View Post

Apple is said to have finalized its acquisition of flash memory maker Anobit, with the final price coming in between $400 million and $500 million....

"between $400 million and $500 million" is business speak for ... $500 million.
post #11 of 42
Quote:
Originally Posted by mdriftmeyer View Post

The memory patents will be a huge thorn into the competition's sides and Apple will most certainly not license them.

It seems like that is the motivation, speculating of course. I guess the question is; if the company already has lisence deals can Apple null and void them? Essentially killing the competition.
post #12 of 42
Quote:
Originally Posted by Hellacool View Post

It seems like that is the motivation, speculating of course. I guess the question is; if the company already has lisence deals can Apple null and void them? Essentially killing the competition.

A contract is a contract. It would turn the world upside down if contracts were nullified by changes in the executive suite. They just don't have to license anything new to the competition.

SJ said it well ages agojust because we're competitors doesn't mean we have to be rude.

Apple seems to adhere to the principle of fair play
post #13 of 42
Quote:
Apple is said to have finalized its acquisition of flash memory maker Anobit, with the final price coming in between $400 million and $500 million.

Flash memory designer - Anobit is fabless, as stated later in the article...
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post #14 of 42
Quote:
Originally Posted by Prof. Peabody View Post

"between $400 million and $500 million" is business speak for ... $500 million.

Except that the transaction was done in New Israel Shekels, so there is no reason it would be a nice round amount in US$. Two billion shekels would be a little more than $500m, so it was probably between 1.6B 1.9B shekels. Who knows, who cares (except the Anobit investors of course). For Apple, $100M here or there hardly makes a difference. :-)
post #15 of 42
Quote:
Originally Posted by jcsegenmd View Post

A contract is a contract. It would turn the world upside down if contracts were nullified by changes in the executive suite. They just don't have to license anything new to the competition.

SJ said it well ages agojust because we're competitors doesn't mean we have to be rude.

Apple seems to adhere to the principle of fair play

There are always termination clauses in contracts, usually with penalties. The question is whether Apple can live with the penalty or perhaps even better, negotiate new terms favorable to Apple.

And I'm sure prior to the closing of the deal, Apple's legal team did their due diligence and reviewed all contractual and legal obligations of Anobit. Having been a contracts manager this is standard practice for any merger or acquisition.
post #16 of 42
Just thinking out loud...

Apple is an interesting company. They manufacture virtually nothing, nor do they directly manage the manufacturing of anything. Instead, they design products, create new technologies, and then sell and market products to consumers.

The risk to Apple is that their contract manufacturers can turn around and compete with Apple. But if Apple owns the designs, the underlying technology, and owns the capital equipment used by those contractors, then what do those contractors really bring to the table? Just labor and the direct management of that labor. And those things are not enough to compete with Apple.

I wonder who paid for the equipment in that Samsung Austin chip facility. Would be interesting if Apple owns everything in that building and Samsung is just providing labor and management skills.
post #17 of 42
@malax

<Except that the transaction was done in New Israel Shekels>

i think that it was done in usa dollars. i think that you should recheck your numbers.

the purchase was the largest acquisition purchase that apple has ever consumated. they recently raised $76+ million. their list of employees that come with the purchase is a like a technology who's who.
post #18 of 42
Quote:
Originally Posted by apple ][ View Post

good news! Apple is getting the best cutting edge technology.

Now if a few people in the previous thread about this topic are not bald faced liars, they will immediately commence with their boycott of apple.

+1


And by the way, to those who wonder if the deal was done in Shekels or $US, I can guarantee, 99.99%, that it was done in $US.
I am an Israeli and have worked for a long time in the Israeli-IT sector. Israeli Tech firms don't work in Shekels unless it is about Salaries or if they purchase something from the local Israeli market.

Just so you know what the reality of Israeli-IT is with regards to US firms - they are here all the time, looking for the next technology / company / team to purchase and integrate. Launching cutting edge IT companies is something Israelis excel at and US firms harvest the latest and greatest on a usual basis. It is quite surprising it took Apple such a long time to arrive here but we are very happy they finally did. Welcome Apple!
post #19 of 42
Quote:
Originally Posted by Blastdoor View Post

I wonder who paid for the equipment in that Samsung Austin chip facility. Would be interesting if Apple owns everything in that building and Samsung is just providing labor and management skills.

Samsung owns lots and lots of patents on methods to make Apple chips efficiently.

If, for example, you were to be put in charge of Apple's machines in that building, would you have the first idea of how to make chips for Apple? Samsung knows how. Indeed, they have patented methods for doing it well.

Apple cannot get its chips without Samsung's know-how. Without Samsung's expertise, Apple products would cost more.
post #20 of 42
Maybe it's analogous to what they do with ARM, where they use an essentially off the shelf design but add some optimisations of their own. Maybe they intend to do the same thing with memory. It's a lot more sensible than designing from scratch, but still gives you an advantage over your competitor.
post #21 of 42
Apple wants to build the whole widget. This might be out of legal concerns as they rumble with Samsung as much as it is about the technology.
post #22 of 42
Quote:
Originally Posted by Blastdoor View Post

Just thinking out loud...

Apple is an interesting company. They manufacture virtually nothing, nor do they directly manage the manufacturing of anything. Instead, they design products, create new technologies, and then sell and market products to consumers.

Apple is an innovator but what did it invent? The smartphone? The tablet? The MP3 player? Just thinking out loud myself.
post #23 of 42
Quote:
Originally Posted by Blastdoor View Post

Just thinking out loud...

Apple is an interesting company. They manufacture virtually nothing, nor do they directly manage the manufacturing of anything. Instead, they design products, create new technologies, and then sell and market products to consumers.

The risk to Apple is that their contract manufacturers can turn around and compete with Apple. But if Apple owns the designs, the underlying technology, and owns the capital equipment used by those contractors, then what do those contractors really bring to the table? Just labor and the direct management of that labor. And those things are not enough to compete with Apple.

I wonder who paid for the equipment in that Samsung Austin chip facility. Would be interesting if Apple owns everything in that building and Samsung is just providing labor and management skills.

It's just amazing how delusional some Apple fans are.

Apple is a marketing / product integration / consumer electronics company - Apple dropped "computer" from its corporate logo years back. As this Anobit acquisition shows, Apple doesn't create / design the underlying technology, they either buy, license, or outsource them. Furthermore, Anobit's patent portfolio is quite insignificant - the real tech / manufacturing companies that create, own all the underlying technology like Toshiba, Samsung spend billions in R&D and some more billions in building fabs.
post #24 of 42
Quote:
Originally Posted by tooltalk View Post

It's just amazing how delusional some Apple fans are.

Apple is a marketing / product integration / consumer electronics company - Apple dropped "computer" from its corporate logo years back. As this Anobit acquisition shows, Apple doesn't create / design the underlying technology, they either buy, license, or outsource them.

This acquisition shows no such thing. Apple has always developed custom ICs and now they are taking that a step further by designing the A4 and A5. True, those chips are based on reference designs -- Apple isn't starting from scratch. But almost nobody starts from scratch these days on anything -- why would they?

Furthermore, Apple develops their own OS, both for Macs and iDevices. Are you telling me that OSX and iOS are identical to NeXTStep and that Apple has made no meaningful contribution to the codebase since that acquisition?

You seem to implicitly be defining "invent" and "technology" in an incredibly narrow, practically useless way in order to snipe at Apple.

The reality is that Apple employs primarily the following types of people (beyond the common corporate bureaucracy that is common to all large companies):

designers, software engineers, hardware engineers, retail staff

They don't employ factory line workers or the people who manage factory line workers.

That's basically the only point I was making, but you had to try and twist it to fit in your puny little way of looking at the world. You kinda suck.
post #25 of 42
Quote:
Originally Posted by Prof. Peabody View Post

"between $400 million and $500 million" is business speak for ... $500 million.

Generally, I'd agree. In this case, I'd say this is blogger speak for $rumored_amount.
post #26 of 42
Quote:
Originally Posted by tooltalk View Post

It's just amazing how delusional some Apple fans are.

Apple is a marketing / product integration / consumer electronics company - Apple dropped "computer" from its corporate logo years back. As this Anobit acquisition shows, Apple doesn't create / design the underlying technology, they either buy, license, or outsource them. Furthermore, Anobit's patent portfolio is quite insignificant - the real tech / manufacturing companies that create, own all the underlying technology like Toshiba, Samsung spend billions in R&D and some more billions in building fabs.

Apple does not create or design the underlying technology? Who did they buy, license MacOS or iOS from? Sure, some components are outsourced, or in-licensed (or takes advantage of open source), but the essence is developed inside Apple. Even in hardware, Apple does a fair bit of design, development and creation in-house, from the chips outward.

Yes, Apple fans can be delusional. In this case, the delusion is all yours.
post #27 of 42
Quote:
Originally Posted by eric475 View Post

Apple is an innovator but what did it invent? The smartphone? The tablet? The MP3 player? Just thinking out loud myself.

Perhaps Apple did not invent any of these product categories. But it sure as hell reinvented them. Even their competitors concede this. Even I do.
post #28 of 42
This is HUGE for Apple. Although this discussion won't get nearly the number of comments as the HTC/Apple decision, it's a far bigger news story.

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post #29 of 42
Apple should be investing in R&D to develop these technologies internally in the US rather than wasting so much money on this pile of crap Anobit. I'm disgusted with Tim Cook. He's clearly not the right man to lead Apple going forward.
post #30 of 42
Quote:
Originally Posted by eric475 View Post

Apple is an innovator but what did it invent? The smartphone? The tablet? The MP3 player? Just thinking out loud myself.

Exactly as the post above stated. Apple did not invent these things, they redefined them.
post #31 of 42
Quote:
Originally Posted by Shaun, UK View Post

Apple should be investing in R&D to develop these technologies internally in the US rather than wasting so much money on this pile of crap Anobit. I'm disgusted with Tim Cook. He's clearly not the right man to lead Apple going forward.

I'm sure this acquisition was decided upon months, if not a year or so prior to Steve's death.
post #32 of 42
Whew! Now to find another 160 companies like it to buy to soak up that cash! Oh unless you wait 3 months. Then you need to find another 180 instead. Get cracking!
post #33 of 42
Quote:
Originally Posted by Shaun, UK View Post

Apple should be investing in R&D to develop these technologies internally in the US rather than wasting so much money on this pile of crap Anobit. I'm disgusted with Tim Cook. He's clearly not the right man to lead Apple going forward.

Please explain why Anobit is a pile of crap? I'm sure we'd all like to know.


I don't particularly see any value in prohibiting others from licensing the technology. Apple has the advantage of owning the IP and employing the talent. They should be able to eventually integrate the Anobit technology right into their SoC reducing another component in the chain.

I see this as Apple just moving more vertical and slowly but surely preparing for the future pricing pressure by developing even more integrated solutions that all but the largest competitors cannot.
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post #34 of 42
Quote:
Originally Posted by Shaun, UK View Post

Apple should be investing in R&D to develop these technologies internally in the US rather than wasting so much money on this pile of crap Anobit. I'm disgusted with Tim Cook. He's clearly not the right man to lead Apple going forward.

Because you're clearly better informed on the state of Apple's business than the CEO....

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post #35 of 42
Quote:
Originally Posted by Nano_tube View Post

+1


And by the way, to those who wonder if the deal was done in Shekels or $US, I can guarantee, 99.99%, that it was done in $US.
I am an Israeli and have worked for a long time in the Israeli-IT sector. Israeli Tech firms don't work in Shekels unless it is about Salaries or if they purchase something from the local Israeli market.

Just so you know what the reality of Israeli-IT is with regards to US firms - they are here all the time, looking for the next technology / company / team to purchase and integrate. Launching cutting edge IT companies is something Israelis excel at and US firms harvest the latest and greatest on a usual basis. It is quite surprising it took Apple such a long time to arrive here but we are very happy they finally did. Welcome Apple!

Good to know. Thanks. I don't know where I got the idea that it wouldn't be a US dollar transaction. At least of the articles said something like "when converted to US dollars" so I made a (bad) assumption.

My point was that whether this was a $400MM deal or a $500MM is not all that interesting. It's a BIG deal in any case (at least on nominal dollars bigger than Apple's acquisition of NeXT). Assuming the 200 employee count is right, basically Apple just bought a couple hundred people for a little more than $2 million each.
post #36 of 42
Quote:
Originally Posted by eric475 View Post

Apple is an innovator but what did it invent? The smartphone? The tablet? The MP3 player? Just thinking out loud myself.

Who said anything about INVENTING. Oh, you! The original poster said interesting, which is not directly related to invention. Troll somewhere else.
post #37 of 42
Quote:
Originally Posted by Shaun, UK View Post

Apple should be investing in R&D to develop these technologies internally in the US rather than wasting so much money on this pile of crap Anobit. I'm disgusted with Tim Cook. He's clearly not the right man to lead Apple going forward.

Anobit isn't a "pile of crap" as you so eloquently put it. Anobit has actually got some amazing tech regarding the extending of the life of flash/NAND cells etc.

You have a strange mindset. Good job you aren't running Apple.
post #38 of 42
Quote:
Originally Posted by knightlie View Post

Flash memory designer - Anobit is fabless, as stated later in the article...

I really don't see Apple making this technology exclusive as there would be little point and no economic gain doing so. For Apple to really benefit they need to derive income from this technology and licensing is the right way to do that.

The other thing people don't seem to realize is that Apple has its own flash technology patents. So this is only adding to Apples portfolio.

I suspect the big value for Apple is that this gives them a foothold in Isreal. They now have a proven management team there to build an engineering center with. Apple likely sees only limited value in flash technology, which is to be replaced in a couple of years. Instead this expands their access to people capable of working at the electron device level.
post #39 of 42
Quote:
Originally Posted by Psych_guy View Post

There are always termination clauses in contracts, usually with penalties. The question is whether Apple can live with the penalty or perhaps even better, negotiate new terms favorable to Apple.

I'm thinking about what is in Apples best interest. Cheap reliable flash is very much in their best interest so I can't see them taking this technology off the market. It would be like trying to corner the DRAM market. Instead it is far better to spread the technology widely to push prices lower.
Quote:
And I'm sure prior to the closing of the deal, Apple's legal team did their due diligence and reviewed all contractual and legal obligations of Anobit. Having been a contracts manager this is standard practice for any merger or acquisition.

Well one is left with the impression that managers at Apple simply whip out the check book on a whim and purchase a company. At least if you believe people's thoughts in this forum. Not only would Apple look at past responsibilities, they would also take a good close look at what is coming from Anobit, a close look at the team to see if they fit with future plans and other factors. I just don't see this as a short term investment on Apples part. Flash isn't the long term future, so there has to be something they saw in Anobits capabilities that drove them to make the purchase.
post #40 of 42
Very smart move. Move away from those Asian companies like Samsung. Having to rely on companies like them exposes your RD work. We all know how those Asian companies run their business. Copy and violate ip is a normal sop for them. Google quickl learned the benefits of doing that same business model.
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