Apple Rumored to Buy ARM; No More Snapdragon, ARM chips for Competing Phones?

After acquiring chipmaker PA Semi and rumored to have completed the acquisition of chipmaker Intrinsity–which is responsible for the Hummingbird ARM-based mobile chip that is rumored to be in the powerful Samsung Galaxy S–and rebadging the latter’s chip as the A4 chip in the iPad, Apple’s furthering its role in the mobile processor space, this time with ARM Holdings, which the company had previously owned.

ARM Holdings is responsible for the reference designs behind ARM-based chipsets, such as those found on the Intrinsity Hummingbird design and the Qualcomm Snapdragon, the latter of which is found on many phones, such as the HTC HD2, the Google Nexus One, and the recently announced HTC Droid Incredible for Verizon Wireless. If Apple is successful in its acquisition of ARM Holdings, the Cupertino, California software and hardware maker could create broad implications for the smartphone maker. Given Apple’s history for taking things in-house and creating proprietary technology, an Apple-acquired ARM Holdings, currently based in the UK, could give Apple additional leverage as the company can stop licensing ARM designs.

If Apple does indeed complete the acquisition and stop licensing ARM designs, the next chapter in mobile chipset could come from other sources, such as NVIDIA which has created its own SoC design on the Tegra2 or from Intel through the x86 Atom-based Moorestown chip. Currently, Intel’s providing an easy port demonstration for Android to run on its Moorestown x86 platform and MeeGo–a joint development by Intel and Nokia–should run capably well on Moorestown.

Despite powerful alternatives, ARM today is still a staple among mobile manufacturers and any actions by Apple’s possible acquisition to move the designs to Apple’s proprietary IP portfolio could have broad impacts.

The rumored report was broken by publication London Evening Standard and sent ARM Holdings shares upwards. Apple has had a long history of ARM–Apple was a cofounder of ARM Holdings along with a company called Acorn. However, since its debacle with the Newton, Apple’s first handheld, Apple wanted to consolidate its books after shutting down productions of the Newton and sold off its share of ARM Holdings. ARM chips, however, have appeared in Apple’s lineup since, with the iPod and iPhone, and more recently the iPad.

The ARM acquisition would be another in a long line of buyouts by Apple of mobile chipset makers. Apple’s debut of the iPad was marked by CEO Steve Jobs noting that the A4 ARM-based chipset was designed in-house, especially since they had earlier acquired PA Semi. However, that may not be the case and there were rumors at the time that Apple had acquired Intrinsity; according to AppleInsider, “designing a CPU usually takes two to three years—making it unlikely that the PA Semi engineers created the iPad chip in the time they’ve been with Apple.” Apple’s ties with Intrinsity was further solidified when an analyst said that Qualcomm spent 3 years and $300 million to take the ARM design up to 1 GHz, well above the 600 MHz design. Nothing in Apple’s books suggested that Apple had invested similar amounts of capital. Analyst Will Strauss of Forward Concepts states: “There’s nothing in the quarterly statements from Apple indicating they spent that kind of money or time” to develop a similarly fast, independent version of the Cortex A8 design. The only other company that had Qualcomm’s 1 Ghz progress was Intrinsity.

The rumored amount for Apple to acquire ARM Holdings is $8 billion.

(via: AppleInsider 1, 2)

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Chuong Nguyen