Apple to buy ARM (and AMD)?

Published Date
22 - Apr - 2010
| Last Updated
22 - Apr - 2010
Apple to buy ARM (and AMD)?

Rumours are running wild about Apple buying ARM Holdings, and even AMD. While the latter rumour has been labelled as incredible by many, a lot of people are starting to lend credence to the former, even “London’s financial district”. It is worthwhile to note that ARM (Advanced RISC Machines) Holdings was founded as a joint venture between Acorn Computers, Apple Computer and VLSI Technology.

Apple recently posted its revenues for 2009-2010, and boy, are they massive. Sitting on huge profits and substantial holdings, Apple could buy ARM and many other companies several times over if it wanted to. It is estimated that a buying bid of ARM would be in the region of $7-8 billion, certainly possible for Apple, who recently posted cash reserves exceeding $41.7 billion. The fact that over 5 million of ARM’s shares were bought last week - raising its stocks prices by 8.1% - certainly indicates some strong activity, possibly of a preliminary buy-out before the take over. If bought, ARM will not be the first semiconductor manufacturing company that Apple has acquired (read P.A. Semi and Intrinsity).

Intel has been getting nightmares about ARM ever since P.A. Semi was bought, losing its uphill struggle to convince Apple to use its Atom line of processors in its mobile devices. AMD too has been trying to woo Apple - though after a long hiatus in attempts - and many high-powered AMD executives have been spotted at Apple’s Cupertino-based campus in the recent past…more on that later. Also worthwhile to note, is the fact that following P.A. Semi’s acquisition, several key engineers left the company to found Agnilux, a startup that has now been bought out by Google.

In case you did not know, ARM does not make the ARM architecture based processors itself, but instead licenses out the architecture to chip-makers, who then sell it or develop it for such mobile/tablet brands as Toshiba, Sony, Nokia, HTC, Apple, Samsung, LG, Dell, and many more.

Not only would Apple’s acquisition benefit the company by increasing their profit margins, it could also kill a LOT of competition by Apple denying them ARM processors. Anti-competitive no doubt, but very, very plausible.

Regarding the AMD rumour, things have been looking up for the company in the recent past, with it only recently announcing its first profitable quarter. While a buyout from Apple seem implausible, it is nevertheless possible, as AMD is considered “cheap”. However, managing foundries would certainly be a headache for the company, and not possibly worth the gain of acquiring the chip-manufacturer.

Apple switched from PowerPC processors to Intel in 2006, and since then, has only offered Intel-based CPUs in its laptops and desktops. But Apple has not been too choosy about its GPUs in the recent past, providing both ATI Radeon (AMD owned) and Nvidia solutions in its desktops, and even going so far as to design its own graphics switching technology and rejecting Nvidia’s Optimus technology for its latest Macbook Pro range.

While Intel’s partnership with Apple may preclude the possibility of AMD’s processors in Apple’s computers, it does not preclude the possibility of AMD’s latest SoC technology, the much awaited Fusion, a GPCPU designed to offer general computing capabilities along with integrated graphics. This might be a great move for Apple, but only after the Fusion chip has been tested and then touted as superior to Nvidia’s solutions (Tegra). The move might otherwise lead Apple regulars away from the company’s products, as their customers have not been interested in bargains in the past, and that is exactly what AMD is known for, low-cost but quality components.

Abhinav LalAbhinav Lal