Apple ARM Strategy

Recent rumors have emerged suggesting Apple intends to purchase ARM holdings for $8 billion. As Apple has $41 billion in cash, it would be a done deal if they wanted to move. Interesting thoughts:

  1. ARM does not produce any chips itself, but licenses its technology to 191 companies, including Texas Instruments, Samsung, Intel, Apple, Nokia, and Infineon. source
  2. List of ARM licensees:
  3. According to 2007, estimates the ARM license costs only 6.7 cents per chip. 2010 estimates expect 4.5 billion products shipped, which dictates an annual revenue of $310.5 million in license fees alone. The license fees could be manipulated to use as leverage against Apple competitors.
  4. Licensing information could also give Apple important data about its competitors and their low-power computing strategies. Consider the recent Google acquisition of Agnilux, for example. If Apple knows how many licenses you purchase, they can gain insight into your success and strategy.
  5. Amazon’s Kindle runs a Freescale ARM-based processor. HTC uses ARM-based processors. Nokia uses ARM-based processors. Blackberry uses ARM-based processors. See where this is going?
  6. Apple is currently embroiled in patent suits with both HTC and Nokia. Gaining control over valuable ARM IP gives them even more leverage.
  7. If Apple buys ARM Holdings, it further represents their believe that the future is mobile.

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