I can see Apple buying a significant stake in ARM Holdings, enough to have massive influence, but not enough to have control. That way they'd keep regulators off their backs while still gaining preferred customer status forever.
However it would probably be much cheaper to get a long term "supply" contract. Chip designs aren't quite the same as real hardware, but we can still think of it like the millions they paid LG to be their LCD panel provider for the next several years.
That sure would be playing hardball, buying ARM. But it seems like their current approach of buying off the shelf designs and having a team that speeds them up is working well (look at the iPad).
Apple is in the business as part of its activities of cultivating links. An example would be that while it was working with IBM and Motorola on the PPC and perhaps keeping an eye on the cell processor, Apple was cultivating Intel (despite toasted bunny fun) so that they were able to make a smooth transmission of products to Intel processors.
This could be particularly important in the coming decade, as companies such as Intel (and IBM) might just bring about leaps in computing technology that the others cannot and Apple would not want to have burnt bridges.
Purchasing ARM Holdings would add to Apple's competitive edge but I don't think that they'd just cut current customers off.
Would that be a 5-speed or automatic smooth transition?
Intriguing idea, but i have to agree with the posters who state that there could be anti-trust issues that would prevent ARM being controlled by Apple.
PS: If Apple was allowed to dish out $8 Billion for ARM Holdings we'd at least end some of the talk about Apple hoarding money for no good reason.
Qualcomm, Nvidia and Intel are some of the competitors.
It would certainly f*ck up Nokia, "Drop the cases or...
...NO ARM FOR YOU!"
Quote:
Originally Posted by SactoMan01
Sorry, it won't happen.
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
Manufactures the chips? Yes. Create the underlying ISA? No. AMD and license have a cross-licensing deal, whereby both can use ISA advancements created by the other royalty, and AMD is allowed to use the x86-32 ISA which Intel created, royalty free. You want to bet if HP swallowed up Intel and revoked AMD's x86 license, people wouldn't complain?
See above. The x86 ISA is controlled soley by Intel, since they created it, and if HP owned them, then yes, nobody can enter the x86 chip market.
You betchya. See above.
AMD's stock would be worth zero until the justice dept. required HP to keep the cross licensing deals. Similar to how Apple would be required to keep licensing ARM technologies.
AMD doesn't manufacture their own chips. GlobalFoundries does the manufacturing.
The latest is ATi is moving manufacturing to GlobalFoundries as well.
Qualcomm, Nvidia and Intel are some of the competitors.
It would certainly f*ck up Nokia, "Drop the cases or...
...NO ARM FOR YOU!"
As has been already stated, if Apple were to buy ARM [something I don't see happening] they would still license their IP while keeping a generation ahead for themselves.
AMD would be different, but I don't see Apple buying AMD.
I can see Apple taking a stake in GlobalFoundries, AMD and more in ARM and Imagination Technologies.
Intel already has a strong stake in ARM and ImgTec.
Apple said they are building out 40-50 more stores in 2010 w/ 25 stores by 2011, just in China alone.
Their plans for the next campus development will be moving forward into breaking ground.
The data center in North Carolina is most certainly the first of several.
A lot of money will be pouring out of Apple as it expands. Even more will be pouring in.
1. 8 Billion is EXTREMELY Expensive for ARM. ARM is in record high. It has nearly triple itself. But unlike other company who are have these gain due to the Tsunami Low Price. ARM has been setting records days after days.
If Apple were to buy ARM, it would properly have majority of shares already.
2. Even if Apple buys it at current price ( worth 5 billion ), it has a P/E of over 80. THIS IS HUGE.
3. Apple dont save money by buying it. It is not like the biggest fixed cost was going to ARM. @ 0.1 USD per core / unit, if apple manage to Ship 500 million iPad, iPod, iPhone in the next 5 years, it would only amount to 50million......
4. AMD is a MUCH MUCH better deal if they spend 5 billion.
The downside of doing this is that ARM will lose customers. That means that the value of ARM after Apple buys it will be lower than the value of ARM before Apple bought it.
However, ARM-derived processors are clearly superior to other products on the market and will likely hold onto that superiority for some time. That means Apple will sell more iDevices than they would have otherwise. The profit to Apple on a single iDevice is equal to the profit to ARM on, what, maybe 10 ARM-dervied CPUs? Maybe a lot more? So on net, this would probably be a big win for Apple.
Plus, I'm sure Apple is considering how awful it would be for Apple if somebody else bought ARM.
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
That and since the whole operation is fabless, they'd be hard pressed finding them someone to build the chips for them. That being said, I don't find it out of the realm of possibility with Jobs. e doesn't like competition at all.
Quote:
Originally Posted by esummers
Buy ARM Holdings and move the Mac to ARM in a few years! This is of course a wild claim, but how about a 50 core ARM processor using GCD for load balancing? Apple has a lot of control over the software stack to make this happen. Execution unit density could be much higher with this configuration. It could also be more energy efficient because cores can be turned off. The iPad runs so cold, i bet they could pack a lot of silicon in there without overheating issues.
On second thought, maybe it isn't so wild. It would give Apple a huge competitive advantage that Microsoft couldn't touch because they have too many hardware partners. There is obviously a lot of interest in this type of design if you look at others out there like the Sony Cell. It would be great for some of Apple's existing markets too: Super Computers, Video Encoding, and Graphic Design.
Or how about just dropping the Mac OS X computer line and just focusing on iPhone OS devices. Apple moving from x86 to another proprietary standard, (especially one that is in no way meant for personnel computers and would put Apple back yeas) would kill the advantages it gained by moving to intel. Make no mistake, Apple wouldn't be where its at using PowerPCs. Boot Camp is a major selling point.
Quote:
Originally Posted by Patranus
Why wouldn't it be ok?
If Apple cut off its competitors, it isn't like they are hindering their competitors from acquiring chips from other manufactures using different core designs.
Business is business, it is not good or bad.
Name one smart phone chip that's currently used that doesn't use the arm instruction set
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
I think this merger would receive anti-trust scrutiny, but ultimately I don't think the anti-trust authorities could make a case stick. There are basically two markets involved here -- (1) the market for smart phones and (2) the market for the CPUs in smart phones. There's a little California company called Intel (maybe you've heard of them) that is trying to make inroads into the market for the CPUs in smart phones. An Apple takeover of ARM would actually help Intel gain market share, so that isn't anti-competitive -- it actually increases competition in that market. As for the smartphone market, I'm sure this would increase apple's marketshare relative to what it otherwise would have been, but probably not by a huge amount. Maybe Apple ends up with 50% of the market instead of the 40% that they might have otherwise eventually had. But 50% isn't a monopoly -- there would still be plenty of other competitors out there.
In fact, I can imagine that Wall Street will view such a merger negatively and send Apple's stock price down, precisely because of what I wrote above. That's because on the face of it, ARM will be less valuable as a part of Apple than it is as an independent company, because being a part of Apple will cause ARM to lose customers.
Of course, the thing that Wall Street will miss (and that the anti-trust people might recognize but will be hard pressed to do anything about), is that while this merger might be bad in the short run for Apple, it's very good in the long run. This would be one of those Steve Jobs chessmaster moves that ordinary Balmeresque CEOs who focus only on the next few quarters would never, ever make.
The bottom line is that the anti-trust enforcers are accustomed to dealing with shortsighted MBA types who do obviously d-bag things for short term profits. An Apple purchase of ARM does not fit that mold at all, and so it would be very hard for the anti-trust guys to deal with this (or at least that's my guess).
Apple has no incentive to prevent other companies from licensing ARM technology.
How much profit does ARM make from the sale of a single CPU? How much profit does Apple make from the sale of a single iPhone? How much would denying competitors access to ARM designs boost Apple's share of the market for smart phones?
Knowing the answers to these questions is all that we need to know in order to figure out what Apple's incentives are here. We can make ballpark estimates for the first two questions. Apple probably makes at least $100 in profit from each iPhone sold. ARM probably makes less than $10 for each CPU sold. So if Apple can sell one more iPhone than they otherwise would have for every 10 CPUs that ARM no longer receives a license fee from, then Apple breaks even on the deal. I think that is a highly plausible scenario.
Comments
However it would probably be much cheaper to get a long term "supply" contract. Chip designs aren't quite the same as real hardware, but we can still think of it like the millions they paid LG to be their LCD panel provider for the next several years.
Apple is in the business as part of its activities of cultivating links. An example would be that while it was working with IBM and Motorola on the PPC and perhaps keeping an eye on the cell processor, Apple was cultivating Intel (despite toasted bunny fun) so that they were able to make a smooth transmission of products to Intel processors.
This could be particularly important in the coming decade, as companies such as Intel (and IBM) might just bring about leaps in computing technology that the others cannot and Apple would not want to have burnt bridges.
Purchasing ARM Holdings would add to Apple's competitive edge but I don't think that they'd just cut current customers off.
Would that be a 5-speed or automatic smooth transition?
PS: If Apple was allowed to dish out $8 Billion for ARM Holdings we'd at least end some of the talk about Apple hoarding money for no good reason.
Would that be a 5-speed or automatic smooth transition?
Okay smarty pants... transition! I had to look twice even so to notice, sometimes you read just what you want.
Anyway, if you drive a TRUE sports car you already know the answer to that!
It would certainly f*ck up Nokia, "Drop the cases or...
...NO ARM FOR YOU!"
Sorry, it won't happen.
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
Manufactures the chips? Yes. Create the underlying ISA? No. AMD and license have a cross-licensing deal, whereby both can use ISA advancements created by the other royalty, and AMD is allowed to use the x86-32 ISA which Intel created, royalty free. You want to bet if HP swallowed up Intel and revoked AMD's x86 license, people wouldn't complain?
See above. The x86 ISA is controlled soley by Intel, since they created it, and if HP owned them, then yes, nobody can enter the x86 chip market.
You betchya. See above.
AMD's stock would be worth zero until the justice dept. required HP to keep the cross licensing deals. Similar to how Apple would be required to keep licensing ARM technologies.
AMD doesn't manufacture their own chips. GlobalFoundries does the manufacturing.
The latest is ATi is moving manufacturing to GlobalFoundries as well.
ATi: http://www.xbitlabs.com/news/video/d...foundries.html
----------------------
How the hell would HP swallow up Intel? Intel's Market cap is more than HP who has a ton of debt with their most recent 3Com acquisition.
Okay smarty pants... transition! I had to look twice even so to notice, sometimes you read just what you want.
Anyway, if you drive a TRUE sports car you already know the answer to that!
Grow a sense of humor.
Qualcomm, Nvidia and Intel are some of the competitors.
It would certainly f*ck up Nokia, "Drop the cases or...
...NO ARM FOR YOU!"
As has been already stated, if Apple were to buy ARM [something I don't see happening] they would still license their IP while keeping a generation ahead for themselves.
AMD would be different, but I don't see Apple buying AMD.
I can see Apple taking a stake in GlobalFoundries, AMD and more in ARM and Imagination Technologies.
Intel already has a strong stake in ARM and ImgTec.
Apple said they are building out 40-50 more stores in 2010 w/ 25 stores by 2011, just in China alone.
Their plans for the next campus development will be moving forward into breaking ground.
The data center in North Carolina is most certainly the first of several.
A lot of money will be pouring out of Apple as it expands. Even more will be pouring in.
How the hell would HP swallow up Intel? Intel's Market cap is more than HP who has a ton of debt with their most recent 3Com acquisition.
It wasn't a realistic deal. The point was what would happen if they did.
If Apple were to buy ARM, it would properly have majority of shares already.
2. Even if Apple buys it at current price ( worth 5 billion ), it has a P/E of over 80. THIS IS HUGE.
3. Apple dont save money by buying it. It is not like the biggest fixed cost was going to ARM. @ 0.1 USD per core / unit, if apple manage to Ship 500 million iPad, iPod, iPhone in the next 5 years, it would only amount to 50million......
4. AMD is a MUCH MUCH better deal if they spend 5 billion.
Develops the new designs, uses them in its products, but licences them to the rest a year or two later.
Nice business model.
However, ARM-derived processors are clearly superior to other products on the market and will likely hold onto that superiority for some time. That means Apple will sell more iDevices than they would have otherwise. The profit to Apple on a single iDevice is equal to the profit to ARM on, what, maybe 10 ARM-dervied CPUs? Maybe a lot more? So on net, this would probably be a big win for Apple.
Plus, I'm sure Apple is considering how awful it would be for Apple if somebody else bought ARM.
So as a shareholder, I say "do it!"
Sorry, it won't happen.
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
That and since the whole operation is fabless, they'd be hard pressed finding them someone to build the chips for them. That being said, I don't find it out of the realm of possibility with Jobs. e doesn't like competition at all.
Buy ARM Holdings and move the Mac to ARM in a few years! This is of course a wild claim, but how about a 50 core ARM processor using GCD for load balancing? Apple has a lot of control over the software stack to make this happen. Execution unit density could be much higher with this configuration. It could also be more energy efficient because cores can be turned off. The iPad runs so cold, i bet they could pack a lot of silicon in there without overheating issues.
On second thought, maybe it isn't so wild. It would give Apple a huge competitive advantage that Microsoft couldn't touch because they have too many hardware partners. There is obviously a lot of interest in this type of design if you look at others out there like the Sony Cell. It would be great for some of Apple's existing markets too: Super Computers, Video Encoding, and Graphic Design.
Or how about just dropping the Mac OS X computer line and just focusing on iPhone OS devices. Apple moving from x86 to another proprietary standard, (especially one that is in no way meant for personnel computers and would put Apple back yeas) would kill the advantages it gained by moving to intel. Make no mistake, Apple wouldn't be where its at using PowerPCs. Boot Camp is a major selling point.
Why wouldn't it be ok?
If Apple cut off its competitors, it isn't like they are hindering their competitors from acquiring chips from other manufactures using different core designs.
Business is business, it is not good or bad.
Name one smart phone chip that's currently used that doesn't use the arm instruction set
Sorry, it won't happen.
The fear that Apple will make ARM instruction proprietary and lock out competitors could run the ire of the Department of Justice Antitrust Division in the USA and the European Union antitrust regulators, and that will kibosh the deal in no time flat.
I think this merger would receive anti-trust scrutiny, but ultimately I don't think the anti-trust authorities could make a case stick. There are basically two markets involved here -- (1) the market for smart phones and (2) the market for the CPUs in smart phones. There's a little California company called Intel (maybe you've heard of them) that is trying to make inroads into the market for the CPUs in smart phones. An Apple takeover of ARM would actually help Intel gain market share, so that isn't anti-competitive -- it actually increases competition in that market. As for the smartphone market, I'm sure this would increase apple's marketshare relative to what it otherwise would have been, but probably not by a huge amount. Maybe Apple ends up with 50% of the market instead of the 40% that they might have otherwise eventually had. But 50% isn't a monopoly -- there would still be plenty of other competitors out there.
In fact, I can imagine that Wall Street will view such a merger negatively and send Apple's stock price down, precisely because of what I wrote above. That's because on the face of it, ARM will be less valuable as a part of Apple than it is as an independent company, because being a part of Apple will cause ARM to lose customers.
Of course, the thing that Wall Street will miss (and that the anti-trust people might recognize but will be hard pressed to do anything about), is that while this merger might be bad in the short run for Apple, it's very good in the long run. This would be one of those Steve Jobs chessmaster moves that ordinary Balmeresque CEOs who focus only on the next few quarters would never, ever make.
The bottom line is that the anti-trust enforcers are accustomed to dealing with shortsighted MBA types who do obviously d-bag things for short term profits. An Apple purchase of ARM does not fit that mold at all, and so it would be very hard for the anti-trust guys to deal with this (or at least that's my guess).
Apple has no incentive to prevent other companies from licensing ARM technology.
How much profit does ARM make from the sale of a single CPU? How much profit does Apple make from the sale of a single iPhone? How much would denying competitors access to ARM designs boost Apple's share of the market for smart phones?
Knowing the answers to these questions is all that we need to know in order to figure out what Apple's incentives are here. We can make ballpark estimates for the first two questions. Apple probably makes at least $100 in profit from each iPhone sold. ARM probably makes less than $10 for each CPU sold. So if Apple can sell one more iPhone than they otherwise would have for every 10 CPUs that ARM no longer receives a license fee from, then Apple breaks even on the deal. I think that is a highly plausible scenario.