Buying chip designers and manufacturers seems to be the new sport in Silicon Valley.
First Apple bought PA Semi and was then rumored to have purchased Intrinsity. Google recently purchased Agnilux. Now rumors are circulating Apple has it’s eyes on the biggest prize of all, ARM. Various news sites around the Internet, including Engadget and TUAW, are reporting a proposed deal around $8 Billion USD that would see the Cupertino giant acquire one of the biggest prizes in the mobile processor space.
To understand the magnitude of such a deal, you need to understand what purchasing ARM would mean. ARM Holdings, as the company is formally known, designs and manufactures processors and systems on a chip for many of the large companies in the mobile space. It either directly creates or licenses its designs to Microsoft, Nokia, Apple, and a host of other top corporations. ARM processors run the iPhone and iPad as well as the mobile devices of some of Apple’s key competitors.
It’s easy to see then that Apple’s motivation in buying ARM would be twofold. First, they would acquire the largest single manufacturer of mobile processors in the world. They could ensure a long term supply of processors for their iPad, iPhone, and any future mobile device platforms. They would no longer be beholden to an outside organisation for a key component. With the design know-how brought in-house, they could also dictate the design and function of future processors. If there’s anything Apple strives for, it is control over every aspect of the product development process. As TUAW points out in their article:
Last January, Apple COO Tim Cook stated, ‘We believe we need to own and control the primary technologies behind the products we make.’
The second motivation may be a tad bit more Machiavellian. By purchasing ARM, Apple puts itself in control of the fates of the mobile processors of their competition. While they would probably never dare to completely cut off their competition, they would certainly place themselves in a position where Apple benefited the most from the expertise and capabilities of ARM. And of course, they would be happy to make a profit off the backs of Microsoft and Nokia.
What do you think of an Apple-owned ARM? Would they become an unstoppable juggernaut by controlling every aspect of the design and manufacturing process of their devices? Do you think Apple should be allowed to purchase and consolidate a company like ARM? Leave us a comment and let us know.[Engadget] [TUAW]