Rumor: Apple To Buy ARM

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Wow, this is a terrible rumor. The London Evening Standard is reporting that Apple is having secret talks with London-based ARM Holdings, who of course licenses and designs the popular ARM-style RISC processors that run in just about anything. While Apple could do it, it would really stick a proverbial knife in every other tech company in the world – and I mean EVERY other tech company.

ARM designs their popular ARM (Advanced RISC Machines) processors which are literally used in everything. Expect in Samsung devices (Samsung makes their own RISC processors), even if the main applications processor is an Intel or AMD chip, you’ll usually find three or four ARM processors running something else on the mainboard.

Apple bought a company a few years back who makes the ARM-style Apple A4 chip that powers the iPad. The Evening Standard is now reporting that Apple is interested in buying ARM to keep their more-powerful processors out of the hands of other companies. This is  very stupid for ARM and moderately stupid for Apple.

Apple buying ARM would be like a car company buying all the fuel companies so only their cars could run on gasoline? What would happen in that case? All the other car companies would redesign their cars in a heartbeat to run on electricity, woodgas, hydrogen, whatever.

In this case, if Apple bought ARM and immediately begun canceling all of ARM’s licensing deals, that would open the door for somebody else to come in with their own successful RISC architecture design. As mentioned earlier, Samsung makes their own. Qualcomm has long been a good ARM chip manufacturer, with their Snapdragon 1GHz chip being pretty popular – maybe they could lure a few ARM engineers away and design their own chips.

Before you leave a comment on this post and say “Well Apple could buy them and still let them sell their chips to other companies” – Think about it. Why? Why would Apple pay $5.2 bil just to get some cheaper ARM processors. Secondly, unless Apple wants to go into the processor business, I don’t think they’re looking to add RISC processors to their riveting product lineup of iMacs, iPods and iPads.

ARM has been valued at $5.2 billion. Needless to say, that’s a lot of money, so high that this isn’t just “Apple buying ARM”, this is “Apple merging with ARM”.

The only thing that would make since about this deal is that the Evening Standard says that Apple is ARM’s biggest customer.Honestly, that makes no sense to me at all – and sounds flat-out wrong, and I haven’t been able to find any third-party sources confirming that. In fact, ARM says that there around 3 billion ARM processors sold every year – which means at least 1.5 bil ARM processors are sold to Apple a year. Apple really must be stockpiling those ARM chips if they’re buying that many a year, because judged by their recent earnings report, they aren’t selling that many devices. But the Evening Standard is a newspaper and I write for a website so they must be right, right? (sense the heavy sarcasm)

To really cement the fact I think this rumor is false, some senior executives at ARM have said in the press that they’d like to see the 1GHz Snapdragon (or similar chips) start to power some netbooks. Doesn’t seem like people with those plans would be so quick to sell out so they can serve Apple overlords. Sounds to me like somebody is leaking information to the Evening Standard so they can pump-and-dump ARM’s stock.