This morning we have raised with some unexpected news: Japanese telecommunications company SoftBank has acquired Britain’s ARM Holdings to 23,400 billion pounds. This deal could have gone unnoticed in the world of the Apple ecosystem if it wasn’t for a small detail of great importance: ARM is in charge of designing the successive generations of chips for devices like the iPhone and the iPad.
The importance of this venture for Apple goes beyond these chips, since both companies are related historically. It was founded in 1990 by three companies: Acorn Computers, VLSI Technologies and own Apple. The origin of this Alliance dates back to the time in which John Sculley, then CEO of Apple, had initiated the development of the Newton.
Apple needed a new architecture for your device and chose the Acorn company which built. ARM was born as a way to continue this development in the future.
Abandonment and return to ARM
As we know, the Newton was a version of the PDA that Apple marketed between 1993 and 1998. It was the pet project of Sculley, which He condemned the device when Steve Jobs returned to Apple in 1997. Something which not is surprising because the history shared by both CEOs. The disappearance of the Newton was with chips designed by ARM and used by Apple in their products.
Almost ten years passed since Apple abandoned the Newton ARM chips and reintroduced them on your iPod
At least until the company from Cupertino decided to reuse them on your iPod around the year 2006. But it was not until the following year when the chips designed by this company entered through the front door. Since 2007 and the launch of the original iPhone, all chips from Apple’s iOS devices using the ARM design.
Although not always in the same way. We must be aware that ARM designs but does not manufacture their own chips. It is the only large company of chips that follow this model, unlike AMD or Intel. Companies like Apple and Samsung pay a royalty for each chip mounted with your designs.
The opportunities of the chips in the series “A”
The case of Apple is also special. From the original iPad A4 chip and the iPhone 4, Apple customizes ARM designs for chips tailored for your own needs. This is how Apple manages to fit and better optimize your hardware and your software. This is possible through key acquisitions the company of California was doing over the years. PA Semi, Intrinsity and Passif Semiconductor were acquired in a space of five years between 2008 and 2013.
Design and customize chips allows Apple as the leader in power and low consumption
Thanks to these efforts, Apple is able to squeeze and add features to the generic design of ARM chips. This allowed Apple to be the first to launch a 64bits with 5s iPhone mobile chip (something that did spread panic in the industry), as well as key elements of safety as the necessary setting for Touch ID secure. With the ninth generation among us for some time, Apple is leading the market.
It is no secret that the “A” series of Apple chips are a key resource. While most manufacturers take ARM designs as is, and mounted them on their devices, Apple customizes them to the maximum. In this way, It manages to increase power at the same time reducing the consumption and adds extra features.
The acquisition of SoftBank and Apple
As we said at the beginning, the Japanese telecommunications company SoftBank just acquire ARM Holdings. The importance of ARM is evident, since 95% of the chips for mobile devices and tablets and almost 100% of the mounted devices of the Internet of things they are designed (but not made) by the British company.
The interest of SoftBank is positioned face to that future Internet of things. But this should not reassure Apple. In the past, Apple has been in situations in which depended entirely on other companies, as evidenced by the fact that Jobs asked to Bill Gates at the end of the nineties to bring Office to Mac. This lesson has led Apple to acquire or internally develop technology that is vital to your business.
He has announced SoftBank, ARM will continue to operate as usual. But Apple (and other manufacturers of smartphones) He no longer has to negotiate only with ARM. SoftBank now has of by, a phone operator who has just won a significant bargaining power.
In the short term we should not notice any change. Although in the long run, it is quite possible that Apple decides to make its chip design for internal use in full.