By Katie Allen: ARM Holdings and Apple (NSDQ: AAPL) go way back, and on Thursday the market was taking the view their relationship could be about to become even tighter.
Shares in the Cambridge-based chip designer soared to an eight-year high as rumours continued to circulate that Apple may have ARM in its sights as an acquisition target.
But before speculators get too carried away, Arm’s chief executive Warren East reminds everyone to look at the economics…
With ARM’s market capitalisation at more than £3 billion, why fork out a fortune to own it when Apple and others can license the designs at a fraction of that?
“Exciting though it is to have the share price pushed up by these rumours, common sense tells us that our standard business model is an excellent way for technology companies to gain access to our technology. Nobody has to buy the company,” East told The Guardian.
At the root of the rumours, ARM’s microchips can be found in most of the world’s mobile phones, including Apple’s iPhone. As consumer demand for smartphones grow and as the devices get smarter, they will need more of Arm’s designs. Having said that, Apple now owns its own chip designer
This article originally appeared in Â© Guardian News & Media Ltd..