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Apple to Make an Offer to Acquire ARM?
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OK so what if Apples just buys the other supplier too? At one point it must work! And then... world domination! Moahahahaha. Awesome.
I second that... while I do believe that this would cause a major paradigm shift. That is obvious. What is not so obvious is what others have said. Apple would be getting very close to nipping on the heels of being a Monopoly. While I reasonably have no prob with monopolies, it is a slippery slope. One which I hope Apple does not fall down.
A monopoly in what? Sun made computers and made Sparc chips, and was not a monopoly. HP made PA-RISC chips and workstations that use them and was not a monopoly. Sony makes cell processors and PS3s and is not a monopoly.
What are you talking about?
Maybe bad for consumers... but maybe not.
The deal might be somewhat negative regarding price competition, enabling Apple to charge slightly more for their products than they might without the deal. That can hurt the consumer pocketbook somewhat. But I believe that Apple would be happy to enable (even foster) a vibrant market in slightly inferior smartphones using their chips - especially since Apple would profit from every sale of such a smartphone.
But the deal might also enable Apple to make even better products than they would otherwise. They are famous for vertical integration. Apple didn't try to make MacOS work on every PC ever manufactured, even though that would have let them sell many more copies of MacOS; Apple would only make MacOS sell on PC's that they themselves manufactured and this enabled them to create an integrated product that worked so smoothly it delighted their customers. But they never got control of the chip design and have always been at the mercy of other companies. Give Apple the capability to design their own chips and they can REALLY integrate their product design thereby creating unimaginably excellent products. That would be a win for consumers.
Dont understand why everyone thinks Apple will stop shipment to others. Apple would continue the products as they do now, however now Apple will get a licensing fee from everyone.
So if Apple does lose out to some new tech they still make a killing in licensing fee's also they can stay one ahead of other competitors.
So if Apple does lose out to some new tech they still make a killing in licensing fee's also they can stay one ahead of other competitors.
Well, it clearly might affect the competition in the smartphone market. I am not saying that it's a monopoly or something, but if Apple buys ARM and then just stops licensing new architecture to anybody, while perhaps not illegal, it would obviously affect the market. Chip developers/manufacturers would simply be stuck with licenses for outdated architectures. I do not know if they have the right to develop new architecture (using ARM instruction set) themselves or not or whether it even matters. I guess they would simply not have any other option but to switch to Atom.
Who said anything about not licensing? Why would apple pay $8B for a company and eliminate its revenue stream?
Less competition while Apple holding the monopoly is still better than less competition while Google is holding it.
Apple would buy ARM to prevent Google from doing the same thing.
Bum bum bum bum...
I think Intel would appreciate Apple absorbing ARM -- that would force other tablet makers toward the ATOM... or other low-power processors (Cirrus Logic? Texas Instruments?).
-Aaron-
I think Intel would appreciate Apple absorbing ARM -- that would force other tablet makers toward the ATOM... or other low-power processors (Cirrus Logic? Texas Instruments?).
-Aaron-
Most of you are looking at this all wrong. First off you've got to see where the pressure do make such a move might be coming from... and that would be the share holders. As the article states apple is sitting on a hoard of cash and the shareholders want apple to spend it.
If such an acquisition were to take place, Apple would NEVER cut off licensing to chip companies. ARM makes its money from licensing and doing so would crash both its revenues and profits; it doesn't make good business sense. ARM is very profitable and has a lot of employees.
As someone already pointed out, Apple doesn't need to bury the competition to sustain (or improve) iPhone sales. The iPhone's success does not come from its hardware (and never will). As we speak better hardware in phones other than the iPhone already exists and those phones aren't outselling the iPhone.
This acquisition is about making money; specifically, money from ARM licensing. ARM dominates the cell phone industry and no one, not even Intel, can compete. Apple gets 2 things out of this deal: a highly profitable and successful IP company and the end to licensing fees (which probably range in the $200 million/year range). The shareholders would be most pleased with such an acquisition.
Cutting of licensure would probably raise serious anti-trust issues AND it makes NO business sense.
If such an acquisition were to take place, Apple would NEVER cut off licensing to chip companies. ARM makes its money from licensing and doing so would crash both its revenues and profits; it doesn't make good business sense. ARM is very profitable and has a lot of employees.
As someone already pointed out, Apple doesn't need to bury the competition to sustain (or improve) iPhone sales. The iPhone's success does not come from its hardware (and never will). As we speak better hardware in phones other than the iPhone already exists and those phones aren't outselling the iPhone.
This acquisition is about making money; specifically, money from ARM licensing. ARM dominates the cell phone industry and no one, not even Intel, can compete. Apple gets 2 things out of this deal: a highly profitable and successful IP company and the end to licensing fees (which probably range in the $200 million/year range). The shareholders would be most pleased with such an acquisition.
Cutting of licensure would probably raise serious anti-trust issues AND it makes NO business sense.
I agree. You don't build monopolies vertically, you only build them horizontally.
This deal would be a step further toward vertical integration for Apple... something they've always tried to do as this leads to superior products. Microsoft never aspired toward vertical integration; they made their OS work on any machine that anyone wanted to build... they were so busy adapting their OS to work on every quirky variant of a PC that they never had time to create a superior user experience.
Monopolies are hard to create and even harder to maintain (although Microsoft nearly succeeded with IE, Office and Windows).
Apple isn't interested in creating a monopoly. They want complete artistic control in the design of their products. If Apple were Rembrandt, they'd want to design and build the canvas, the brushes and the paints they use to create their masterpiece.
the Sony model
Sony makes sensors for DSLR's and other cameras. They design the sensors, fab them, etc. They use them in their own products.
To make such a business effective they also sell these sensors to anyone who wants to buy them. Apple would do the same.
The big differentiator in owning the chip company is that you can come out with a new design and use it in your products first. Sell your other chips to other manufacturers.
If Apple were to buy this company, it would be a self destructive strategy to withhold anything. Other vendors would be forced to find other solutions - which might just lead to those other solutions being better. Necessity being the mother of invention, and all that.
Sony makes sensors for DSLR's and other cameras. They design the sensors, fab them, etc. They use them in their own products.
To make such a business effective they also sell these sensors to anyone who wants to buy them. Apple would do the same.
The big differentiator in owning the chip company is that you can come out with a new design and use it in your products first. Sell your other chips to other manufacturers.
If Apple were to buy this company, it would be a self destructive strategy to withhold anything. Other vendors would be forced to find other solutions - which might just lead to those other solutions being better. Necessity being the mother of invention, and all that.
i think he means anti-trust. i would consitute an anti-trust case IF Apple were to cut licensing to other chip companies. That is highly unlikely though... not only is it bad business, it'll never clear anti-trust hurdles.
if this deal happens Apple will have to make many guarantees to the FTC that they wouldn't do such a thing.
All the positive votes...
This is the single thing that Apple could do that would really make me consider switching devices. To block competition by purchasing ARM is really a bunch of ********.
This is the last thing you want if you want to see the mobile market grow and innovate.
This is the single thing that Apple could do that would really make me consider switching devices. To block competition by purchasing ARM is really a bunch of ********.
This is the last thing you want if you want to see the mobile market grow and innovate.
TI makes ARMs. You'd be looking at MIPS as the most logical low power alternative, in all likelihood. Possibly Renesas SuperH.
Only thing is though that there is absolutely no indication that Google would buy ARM.
And if Google did buy this start up company called Angilux, then it's reasonable to think that they have hedged their bets with them.
Finally, Google are making profits out of Android, whose attraction is to run on anything. It wouldn't make sense for Google to restrict their own selling point. The more suppliers that take ARM chips because they are independent is better news for G.
I think that if this were to happen, sure it would probably cause a massive disruption, but as others said it would probably let other startup companies make even better chips. Look at PA Semi, a bunch of them left after the take over from Apple, and have actually ended up with Google in a roundabout way. But I dont think it will happen. Maybe they will take a large percentage of stock to prevent other buy outs.
Although, lately, I cant help but think of the saying that was attached to Microsoft - 'embrace, extend, extinguish', when I think of Apple now...