EETimes.com – ARM stock rises on Apple takeover talk

EETimes.com – ARM stock rises on Apple takeover talk.


EE Times

LONDON — London’s financial district was full of rumors on Wednesday (April 21) that Apple is considering a takeover of processor intellectual property licensor ARM Holdings plc (Cambridge, England), according to the London Evening Standard newspaper.ARM’s share price rose to 255 pence on Thursday morning. However, analysts at financial institutions were of mixed opinions as to whether the rumor was credible. A spokesperson for ARM said the company was not commenting on the rumor.

Apple is said to be an architectural licensee of ARM’s processor architecture and two years ago bought a well-regarded chip design team, P.A.Semi. so it could develop its own chips. The first fruit of that effort is thought to be the A4 chip inside Apple’s iPad tablet computer.

The newspaper quoted an un-named London stock broker saying: “A deal would make a lot of sense for Apple. That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.”

Apple might have to bid 400 pence a share to pull off the acquisition which would value ARM at more than £5.2 billion (about $8 billion), the newspaper said.

“Quite incredible,” said Janardan Menon, an analyst with Liberum Capital in London. “I don’t see what Apple would get out of this. Apple has a strategy to design its own chips, but only for application processors, and it can do that with ARM intellectual property. It doesn’t need to buy the company.”

Menon continued: “The only reason for Apple to buy ARM is deny the technology to other IP licensors. But Apple can buy an architectural license, change the architecture as much as they want to develop a differentiated product.”

Nonetheless the ARM stock price stayed close to the levels achieved overnight.

In recent days there have also been rumors about design teams working on novel processors, possibly ARM- based, for server applications in the interest of saving power in data centers and Google and Microsoft interest in the same

  1. Apple buying ARM doesn’t seem to make sense at the beginning. If Apple does, then Apple wants to be like Intel in mobile CPU area. But intel doesn’t make computer itself, so no competition with own customer. Moreover if Apple buys ARM, then the popularity of ARM will diminish, as one cannot guarantee that Apple will licence ARM to its competitors. Apple might not license ARM to TI, then Moto Droid should use Apple’s CPU with higher price. How Android can compete with iPhone in this case? Atom is not an option for low power smartphone. In second thought, maybe this is what Apple wants in the end by buying ARM. Kill the Android by buying ARM, and allowing many iPhone clons selling Apple A4 chip, so that whole smartphone industry is under Apple’s software ecosystem (OS, apps, itunes, etc..). If this is done, Apple will be MS+Intel in mobile area. what a grand scheme… May need to buy ARM stock now??

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