Softbank has agreed a $32 billion takeover of ARM Holdings, the UK-based chip designer behind the processors used in iPhones, iPads, Apple Watch and Apple TV. This deal is likely to impact the future of all involved in ARM, including Apple.
Such is the strategic importance of ARM Holdings, Apple was itself rumored to be considering acquisition of ARM back in 2010, when speculation estimated the price at around $5 billion.
"This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank's growth strategy going forward," said SoftBank founder, Masayoshi Son in a statement.
What’s interesting about ARM (other than its strong, historical association with Apple) is that it doesn’t actually make anything. ARM’s engineers basically create chip reference designs it then licenses out to others. (This excellent article offers some deeply valuable insights into ARM.)
Apple uses heavily modified ARM reference designs within its own A-series chips, for example. Right now it is estimated that over 35% of all smart devices on the planet used some form of ARM technology and that’s near 90 percent of smartphones.
So, what’s driving the deal?
He wasn’t wrong. And it’s not just cars. You see, Softbank is working – hard – to develop robotics, AI and connected devices.
“ARM stands to be central to the tech industry's shift to the 'internet of things' - a network of devices, vehicles and building sensors that collect and exchange data - a stated focus for SoftBank founder Masayoshi Son,” Reuters reports.
Son calls connected intelligence (everything from robotics to AI and the IoT) the next “paradigm shift” in technology. That’s why the company is investing in the intelligence it needs to support this vision. Softbank also owns Sprint, Alibaba and the Pepper robot.
This means in future the robot parking your car will be using the same chip as the AI inside the transit system and the one inside your Watch, iPhone or connected electricity supply – even street lamps.
The Apple connection
What’s also interesting is the deep Apple connection.
ARM was originally founded in 1990 as a joint venture between Apple, Acorn, and VLSI Technology to develop a chip for the Apple Newton, now widely regarded as the world’s first decent mobile device.
Apple also has a relationship with Softbank. Who else remembers how Son secured an exclusive deal to sell iPhone in Japan from Steve Jobs? Clearly in terms of future vision, there's some synchronicity between the two firms...
This means Apple’s influence is all over this deal, and it may be about to enter a fruitful collaboration with Softbank, with a focus on connected intelligence, robotoics and the Internet of Things (IoT).
(Think how useful technologies like differential privacy might be to provide security and privacy within the IoT.)
With billions of devices expected to become connected devices in the years ahead, a future product road map is essential. ARM is already developing reference designs for even smaller, powerful, low energy processors.
The challenge is to develop designs for 7-nanometer processors. This may have some relevance to Apple’s future plans, as its now sole chip supplier, TSMC, announced plans to begin production of 7-nanometer chips in 2017. Apple’s other partners, Intel and IBM, are also engaged in development of 7-nanometer chips.
Only this month ARM revealed a new collaboration with the INSITE collaborative research program on design at nanoelectroics research institute IMEC (Leuven, Belgium).
The cards are on the table
One thing is certain, ARM is very important to Apple’s future plans and this deal is likely to have a big impact on Cupertino. Apple has also been working to build its own processor development teams in recent years, so is it possible the company already has its own contingency plan?
I don’t see that.
I see a perfect confluence of interested parties pooling some of their efforts to bring the chips that offer 4+ times the computing power at lower energy costs in smaller form factors than existing processors? (IBM in 2015 claimed such chips have four times more processing power than what’s already available.)
There’s also potential effect on Apple’s future products. It’s an open secret Apple is working on Apple Car, a connected, intelligent and probably self-driving vehicle. There have been big questions as to how the company plans to bring such vehicles to market – is it possible we’re watching the company and its future partners play their cards to set the table correctly for this next game?
Place your bets
I’d watch this deal closely as it seems indicative of a confluence of factors all of which should help Apple in the race to get its car on the road. Will this be a combination of players destined to drive Cupertino into the 21st Century, or a final nail driven into the company's future plans? On the basis of what we know about Apple, I'm minded to favor the former, but there is little harm in watching how the cards fall.
Google+? If you use social media and happen to be a Google+ user, why not join AppleHolic's Kool Aid Corner community and join the conversation as we pursue the spirit of the New Model Apple?
Want Apple TV tips? If you want to learn how to get the very best out of your Apple TV, please visit my Apple TV website.
Got a story? Drop me a line via Twitter or in comments below and let me know. I'd like it if you chose to follow me on Twitter so I can let you know when fresh items are published here first on Computerworld.