Apple reportedly participated in early stage conversations with SoftBank about acquiring its Arm Holdings.
Arm Holdings is the semiconductor conductor whose ARM architecture Apple licenses for everything from its A-series chips for iPhone and iPad to its upcoming Apple Silicon processors for Mac.
SoftBank’s parent company bought Arm for $32 billion in 2016. It is now part of the $100 billion Vision Fund.
While an Apple acquisition of Arm’s licensing operations may make sense on paper, however, Apple reportedly dropped out of bidding because of concerns about how it would work with competitors who depend on Arm’s technologies. As Bloomberg phrased it its report: “Arm’s licensing operation would fit poorly within Apple’s hardware and software business model.”
SoftBank is currently negotiating with Nvidia. Any deal that gets struck will be subject to lots of scrutiny from government agencies. Given that Apple is currently facing antitrust investigations, perhaps dropping out of negotiations was a smart idea for that reason.
Apple has a long history with Arm
Apple’s involvement with Arm dates back to the very start. It was founded in November 1990 as Advanced RISC Machines (ARM) as a joint venture between Acorn Computers, Apple, and VLSI Technology. Former Apple VP Larry Tesler, who died earlier this year, thought that Arm’s low-cost, low-power, high-performance technology would be the perfect mobile processor for the Newton MessagePad. Apple took a 43% share in the company for $3 million.
When Steve Jobs returned to Apple in the late 1990s, he sold a large share of Apple’s Arm holdings. This was at a time when Apple was dangerously close to bankruptcy.
Apple then started using ARM’s technology again with the iPhone and the iPad. Recently, Apple announced that it was going to use ARM architecture on the Mac with its new Apple Silicon. (As Rene Ritchie pointed out in a useful article recently, however, this ARM instruction set architecture isn’t the same thing as using an ARM chipset. The distinction may be subtle, but it’s important.)
To date, Apple used used Arm’s technology in more than 2 billion devices shipped over the past decade.