Fresh off an amazing quarter, Apple acquisition rumors are flying fast and furiously. The iPhone maker is supposed to have a lot of interest in buying ARM Holdings, which could have a dramatic impact on the rest of the smartphone space.
Apple has an enormous war chest and it would reportedly cost about $8 billion to get ARM. ARM supplies many of the chips inside smartphone, including the iPhone, and taking it in-house would give it a huge strategic advantage over its rivals.
“A deal would make a lot of sense for Apple,” an insider told the Evening Standard. “That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.”
The idea would be wild but I wouldn’t put too much into the rumor, as ARM is publicly distancing itself from the news.
“Exciting though it is to have the share price pushed up by these rumors, common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology,” said ARM CEO Warren East in an interview with the Guardian. “Nobody has to buy the company.”
Additionally, this doesn’t seem to follow Apple’s standard way of doing business. Generally, Apple prefers to buy smaller companies and build its resources in house. The company purchased P.A. Semi in 2008 to craft its own chips – like the A4 – but that was a much smaller acquisition than ARM would be. It also bought Quattro Wireless to be the foundation of its iAd platform, but this was also relatively cheap – Apple paid about $275 million while Google is trying to complete its purchase of AdMob for $750 million.
Pascal-Emmanuel Gobry also points out a few more flaws in a merger: competitors will be able to standardize on Qualcomm or some other company’s chips (removing the competitive advantage of an ARM deal) and Apple probably doesn’t need the technology.