Wow. At $8B, this would easily be the most significant use of Apple's cash in all its history. It had better be a blockbuster in terms of expected synergies.
On which topic: where would synergies come from? I.e., how can Apple produce more revenue for the same dollar of cost and/or produce the same revenue for a lower dollar of cost from this acquisition?
Btw, AMD can be had for $6.5B.....
Apple makes home computers, mobile phones and digital music players. They've just created a new category of mobile computing with the iPad. Of the four categories three of them use ARM technology, home computers being the only one that does not. Apple is apparently the largest customer in the world for ARM processors. It also has a licence to produce ARM processors. If it bought ARM holdings Apple would no longer need to pay for its ARM licence to produce and use ARM processors. That could benefit Apple at the very least as a simple cost savings in the long run since it relies on that technology so much and will rely on it more and more in the future. The profit that ARM sees form its largest customer, Apple, would now remain with Apple along with all of the ARM IP. Plus it would give Apple the leverage in how that technology is used with third parties. If that isn't synergy then I don't know what is.
Remember we are talking about $9 billion (or $9000 million for those across the pond) which is far from chump change or money just to mess with someone.
People keep quoting 8b 9b ... Don't you think if Apple did make a play for ARM (a real offer) the other heavyweights in the industry aren't gonna know or somehow be made aware of it? Would Google throw 10 or 12b in stock at ARM just to see how they'd react? Apple has never been big on bidding wars and lost a deal to Google cause they didn't make a counter offer.
Now, if Apple is offering 8 or 9b in CASH that would likely be looked at more favorably then 10b in Google stock (Google usually pays with stock it seems) but 11b or 12b at some point the stock will look more attractive. It's a tough call.
What it all comes down to is this... If ARM is looking for a buyer what should Apples move be? If ARM isn't then if Apple did make an offer anyway it might open up a hornets nest Apple isn't gonna like dealing with.
Question, does ARM actually manufacture the processors themselves?
No, and this is an intentional business decision. By only selling designs they'll never be in the situation where their own business interests will collide with that of their customers (i.e. withholding a new design because they want to build and sell it themselves). By only providing designs they have no interest to *not* sell designs since this is their only source of income.
If I remember correctly something like that happened a couple of years ago were Intel would not license one of their newer models to licensees of the predecessor design which is why licensing from a company which designs, builds and sells processors is suspicious to third parties.
Apple might not intend to buy ARM at all. Keep in mind, it's just a rumour.
You're quite right but the fact that this rumor WAS floated in the first place might start the gears of progress rolling anyway. Rumor or not if you don't think Google and Microsoft and lots of other players aren't holding high level meetings to discuss the very thing we are jawboning about here then you'd be crazy.. Now if just one of those closed door meetings end with 'someone else' making a possible offer to ARM themselves then RUMOR becomes REALITY.
If you had said "AppleTV", and if AppleTV used ARM, then I might be persuaded.
Apple doesn't want people to buy blu-ray discs , they want people to buy the video off of itunes instead. So what better way to stop people from buying blu-ray discs then by buying the processor that a lot of the blu-ray hardware uses. Broadcoms chips use arm cpus in them .These same broadcom chips are used in a lot of blu-ray players.
Why are we reading about this here? I hope if Apple truly DOES want to aquire ARM, that it's essentially a done deal and they're just hashing out the details... Seems Apple is struggling with privacy these days...
Apple doesn't want people to buy blu-ray discs , they want people to buy the video off of itunes instead. So what better way to stop people from buying blu-ray discs then by buying the processor that a lot of the blu-ray hardware uses. Broadcoms chips use arm cpus in them .These same broadcom chips are used in a lot of blu-ray players.
While I very much agree with you that Apple doesn't want people buying bluray discs... I don't think a buyout of ARM would have ANY impact what so ever. ARM has contracts and likely long term contracts that Apple couldn't dismiss AND I'm thinking many regulatory agencies would only permit the sale with provisions that ARM designs remain 'licensable' for a set number of years.
Finally from the looks of it Apple doesn't NEED to do anything to slow the sales of Bluray. The studios are taking care of that ALL BY THEMSELVES.
Why are we reading about this here? I hope if Apple truly DOES want to aquire ARM, that it's essentially a done deal and they're just hashing out the details... Seems Apple is struggling with privacy these days...
If what you say is true then yes this leak could have come from someone inside Apple... However it would be far more likely to be an 'anonymous flare' shot from someone inside ARM. What's better than ONE company wanting to buy you? TWO .... THREE ....
Tho a move like that could crash the whole deal down so its a somewhat risky move. What if you scream fire and in the end Apple is still the only one with a bucket of water? Would Apple likely rethink their offer or what if 3 companies came and Apple pulled out and the remaining two got into a mild biding war and the winner gets flagged by a regulatory agency that threatens to kill the entire deal.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
Nope. Apple derives great value from the far larger ecosystem that their computers provide. Not to mention the fact that the OS for those mobile devices is a subset of OS X. Their desktop profits will continue to grow nicely, even if the mobile device profits grow faster.
Then they could make their own processors as well as ARM processors so then they could make double profits from licensing with this buyout and selling from their own plant. They'd make their money back easily.
Hmm... I wonder if AMD could be in their future as well, Then they would have mobile and laptop/desktop chips under their belt, and the ability to mass produce.
Just my 2¢ (accounting for US inflation it might be more like 1/2¢)
For Apples sake, lets hope Google doesn't swoop in and jack it for Android before Apple can close the deal.
We have all seen Googles willingness to swoop in and jack a deal when Apple is on the move.
I can think of nothing better than if Google tried to buy ARM!
It would throw GOOG into further disarray, waste their money, screw up the other mobile device vendors, and bring them legal troubles. Meanwhile Apple has no plans to buy ARM anyway.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
True on the first part but false on the second. Apple's coup de grace is having a high volume desktop OS that ties everything in the ecosystem together and propels their mobile strategy.
Here's what Jobs's had to say about Apple's cash on hand during the last quarterly earnings
The company he founded was now big enough that it had to "think big" to move the needle, Jobs said.
Buying ARM is thinking "big" folks. I think Apple runs ARM Holdings like any wholly subsidiary. They let ARM do their thing and they apply Apple marketing. No licensee is going to be left out because ARM has to generate profit.
As for Intel, Google and other companies. Come'on folks..mergers aren't just about the money. Apple's been with ARM since its foundation. Companies are under no obligation to sell themselves to the highest bidder.
If Adobe didn't make Mac software, what would happen to the Mac Pro line of products?
I supposed Mac Pro users would continue to run apps from companies like Avid, Apple, Autodesk and more. Adobe doesn't define the Macintosh Professional arena.
Comments
Wow. At $8B, this would easily be the most significant use of Apple's cash in all its history. It had better be a blockbuster in terms of expected synergies.
On which topic: where would synergies come from? I.e., how can Apple produce more revenue for the same dollar of cost and/or produce the same revenue for a lower dollar of cost from this acquisition?
Btw, AMD can be had for $6.5B.....
Apple makes home computers, mobile phones and digital music players. They've just created a new category of mobile computing with the iPad. Of the four categories three of them use ARM technology, home computers being the only one that does not. Apple is apparently the largest customer in the world for ARM processors. It also has a licence to produce ARM processors. If it bought ARM holdings Apple would no longer need to pay for its ARM licence to produce and use ARM processors. That could benefit Apple at the very least as a simple cost savings in the long run since it relies on that technology so much and will rely on it more and more in the future. The profit that ARM sees form its largest customer, Apple, would now remain with Apple along with all of the ARM IP. Plus it would give Apple the leverage in how that technology is used with third parties. If that isn't synergy then I don't know what is.
Remember we are talking about $9 billion (or $9000 million for those across the pond) which is far from chump change or money just to mess with someone.
People keep quoting 8b 9b ... Don't you think if Apple did make a play for ARM (a real offer) the other heavyweights in the industry aren't gonna know or somehow be made aware of it? Would Google throw 10 or 12b in stock at ARM just to see how they'd react? Apple has never been big on bidding wars and lost a deal to Google cause they didn't make a counter offer.
Now, if Apple is offering 8 or 9b in CASH that would likely be looked at more favorably then 10b in Google stock (Google usually pays with stock it seems) but 11b or 12b at some point the stock will look more attractive. It's a tough call.
What it all comes down to is this... If ARM is looking for a buyer what should Apples move be? If ARM isn't then if Apple did make an offer anyway it might open up a hornets nest Apple isn't gonna like dealing with.
Question, does ARM actually manufacture the processors themselves?
No, and this is an intentional business decision. By only selling designs they'll never be in the situation where their own business interests will collide with that of their customers (i.e. withholding a new design because they want to build and sell it themselves). By only providing designs they have no interest to *not* sell designs since this is their only source of income.
If I remember correctly something like that happened a couple of years ago were Intel would not license one of their newer models to licensees of the predecessor design which is why licensing from a company which designs, builds and sells processors is suspicious to third parties.
Apple might not intend to buy ARM at all. Keep in mind, it's just a rumour.
You're quite right but the fact that this rumor WAS floated in the first place might start the gears of progress rolling anyway. Rumor or not if you don't think Google and Microsoft and lots of other players aren't holding high level meetings to discuss the very thing we are jawboning about here then you'd be crazy.. Now if just one of those closed door meetings end with 'someone else' making a possible offer to ARM themselves then RUMOR becomes REALITY.
If you had said "AppleTV", and if AppleTV used ARM, then I might be persuaded.
Apple doesn't want people to buy blu-ray discs , they want people to buy the video off of itunes instead. So what better way to stop people from buying blu-ray discs then by buying the processor that a lot of the blu-ray hardware uses. Broadcoms chips use arm cpus in them .These same broadcom chips are used in a lot of blu-ray players.
Apple doesn't want people to buy blu-ray discs , they want people to buy the video off of itunes instead. So what better way to stop people from buying blu-ray discs then by buying the processor that a lot of the blu-ray hardware uses. Broadcoms chips use arm cpus in them .These same broadcom chips are used in a lot of blu-ray players.
While I very much agree with you that Apple doesn't want people buying bluray discs... I don't think a buyout of ARM would have ANY impact what so ever. ARM has contracts and likely long term contracts that Apple couldn't dismiss AND I'm thinking many regulatory agencies would only permit the sale with provisions that ARM designs remain 'licensable' for a set number of years.
Finally from the looks of it Apple doesn't NEED to do anything to slow the sales of Bluray. The studios are taking care of that ALL BY THEMSELVES.
This is the same problem with buying Adobe
Well, ARM at least has some worthwhile IP. It's hard to see what of value Adobe offers Apple.
Why are we reading about this here? I hope if Apple truly DOES want to aquire ARM, that it's essentially a done deal and they're just hashing out the details... Seems Apple is struggling with privacy these days...
If what you say is true then yes this leak could have come from someone inside Apple... However it would be far more likely to be an 'anonymous flare' shot from someone inside ARM. What's better than ONE company wanting to buy you? TWO .... THREE ....
Tho a move like that could crash the whole deal down so its a somewhat risky move. What if you scream fire and in the end Apple is still the only one with a bucket of water? Would Apple likely rethink their offer or what if 3 companies came and Apple pulled out and the remaining two got into a mild biding war and the winner gets flagged by a regulatory agency that threatens to kill the entire deal.
Or how about just dropping the Mac OS X computer line and just focusing on iPhone OS devices.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
!!!BLASPHEMY!!!
Well, ARM at least has some worthwhile IP. It's hard to see what of value Adobe offers Apple.
Yeah because nobody uses Adobe's products. When was the last time someone actually used photoshop or acrobat.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
Nope. Apple derives great value from the far larger ecosystem that their computers provide. Not to mention the fact that the OS for those mobile devices is a subset of OS X. Their desktop profits will continue to grow nicely, even if the mobile device profits grow faster.
Apple should build their own manufacturing plant.
Then they could make their own processors as well as ARM processors so then they could make double profits from licensing with this buyout and selling from their own plant. They'd make their money back easily.
Hmm... I wonder if AMD could be in their future as well, Then they would have mobile and laptop/desktop chips under their belt, and the ability to mass produce.
Just my 2¢ (accounting for US inflation it might be more like 1/2¢)
For Apples sake, lets hope Google doesn't swoop in and jack it for Android before Apple can close the deal.
We have all seen Googles willingness to swoop in and jack a deal when Apple is on the move.
I can think of nothing better than if Google tried to buy ARM!
It would throw GOOG into further disarray, waste their money, screw up the other mobile device vendors, and bring them legal troubles. Meanwhile Apple has no plans to buy ARM anyway.
My guess is that Mac Desktops are a smaller and smaller portion of Apple's business.
They are a mobile device company now. The desktop stuff is nothing but a legacy boat anchor to a mobile device company.
True on the first part but false on the second. Apple's coup de grace is having a high volume desktop OS that ties everything in the ecosystem together and propels their mobile strategy.
Here's what Jobs's had to say about Apple's cash on hand during the last quarterly earnings
http://www.reuters.com/article/idUSN259833320100225
The company he founded was now big enough that it had to "think big" to move the needle, Jobs said.
Buying ARM is thinking "big" folks. I think Apple runs ARM Holdings like any wholly subsidiary. They let ARM do their thing and they apply Apple marketing. No licensee is going to be left out because ARM has to generate profit.
As for Intel, Google and other companies. Come'on folks..mergers aren't just about the money. Apple's been with ARM since its foundation. Companies are under no obligation to sell themselves to the highest bidder.
Well, ARM at least has some worthwhile IP. It's hard to see what of value Adobe offers Apple.
If Adobe didn't make Mac software, what would happen to the Mac Pro line of products?
If Adobe didn't make Mac software, what would happen to the Mac Pro line of products?
I supposed Mac Pro users would continue to run apps from companies like Avid, Apple, Autodesk and more. Adobe doesn't define the Macintosh Professional arena.
There's a reason why they snapped up Intrinsity. No one else can take a Cortex A8 beyond 650hz. Apple knows they have a gold mine here to license.
Qualcomm's Snapdragon platform goes up to 1Ghz too.
But I'm guessing it was cheaper to buy Intrinsity than Qualcomm.
For Apples sake, lets hope Google doesn't swoop in and jack it for Android before Apple can close the deal.
We have all seen Googles willingness to swoop in and jack a deal when Apple is on the move.
Maybe that's the point.