Apple Inc.’s reliable network of chip suppliers may have just been disrupted by SoftBank. The week breaks with news of top processor maker ARM Holdings being snatched up for $32 billion. The acquisition was made by SoftBank Group Corp. and is said to have been a long time coming. Based in the U.K., the company is part of the few trusted suppliers that design the chips seen in Apple devices. ARM has a hand in production Apple TV, Apple Watch, as well as iPhone processors.
SoftBank buys ARM Holdings
The acquisition of ARM Holdings is not entirely surprising. Tim Cook and co. were said to be thinking of buying the firm too back in 2010. Apple would have allegedly paid $5 billion back then, which is significantly less than the $32 billion ARM scored from SoftBack now. ARM’s place in the communication industry was formidable even 6 years ago. It’s influence and expertise in the sector have only grown since then.
Experts claim the SoftBank buyout is probably driven by ARM’s relationship with the iPhone maker. SoftBank is a Japanese giant and a huge influencer in the international telecomms space. It has been making a deeper push into the handset market for some time now. Gaining a part of Apple Inc.’s business should prove to be a worthwhile investment over the years.
The founder of SoftBank, Masayoshi Son, said in a statement that ARM Holdings is a very vital purchase. “I expect ARM to be a key pillar of SoftBank’s growth strategy going forward,” he states.
An interesting thing about ARM, pointed out by analysts, it that it doesn’t actually produce physical chips. Instead, the firm basically creates processor designs for others companies to make. Even the designs of Apple’s A-series chips are the work of ARM, sources state.
Apple & ARM is the future
Although, this alone doesn’t justify the high $32 billion price tag of its sellout. The acquisition value is only put into context when one considers the more than 35 percent stake that ARM has in the world’s smart devices. That is around 90 percent of the globes smartphones, according to Computer World.
Moving forward, ARM should have a large hold in the IoT and AI space. Tech giant envision a future that promises just about every object being inter-connected as well as devices that make efficient use of artificial intelligence. Apple too has has numerous AI and machine learning ventures going on. Bearing this, it relationship with ARM is expected to deepen over the next few years.
“ARM stands to be central to the tech industry’s shift to the ‘internet of things’,” Reuters writes. This statement is seconded by Son himself.
Apple Inc. and other formidable makers of consumer tech will likely see themselves involved a lot more with the likes of ARM Holdings. However, SoftBank who is thought to have scored massively by buying the chip designer.