The Rumor Mill. Apple and ARM? Apple and AMD? ARM and Intel?

Oh it has been a busy week of rumors and speculation in our industry.

First there was the report that Apple is looking at designing in AMD MPUs in future MacBook designs. This should come as no surprise since AMD MPUs are 80x86 and Apple’s PC product line is based on Intel MPUs. Apple is the only major PC vendor that does not offer products with AMD MPUs. I am surprised that it has taken this long for Apple to consider AMD as a second source.

However, this set off speculation that Apple would buy AMD? That makes no sense. Apple would not cut itself off from a major MPU vendor like Intel. Also, there would be legal issues about an OEM buying a key chip vendor that supplies its competitors. How this idea ever made it to print or on-line media is beyond me. I guess it is one way to get attention.

We then had the rumor that came out of England that Apple was considering buying ARM. It was reasoned that Apple was flush with cash, around $40 billion and that ARM looks so attractive. Acquiring ARM could cost about $8 billion. This one makes no sense for so many reasons.

Apple is not the kind of company to make big acquisitions. It goes out and finds small strategic companies and integrates the talent and technologies in the process of building up its own resources. The acquisition of PA Semi for the design team that came up with the iPad A4 processor is a recent example.

Apple can get the key technology it needs via licensing. It has a special architectural license with ARM. Apple has done its own customization with the A4.

If the reason to acquire ARM would be to throttle its competition, there would be huge blowback for Apple. There are over 100 silicon partners identified on ARM’s website and many more other companies who are licensed. I doubt Apple would cut off these companies. Some of them are key suppliers of components other than MPUs. ARM licensees ship over 4 billion units annually. It is not just into cell phones but numerous other markets. The ARM architecture represents between 20% and 25% of 32-bit MCU shipments.

An Apple acquisition of ARM would have wide ranging ramifications for competitors, OEMs, foundries and chip vendors. ARM is UK-based. The US and EU government agencies would be all over this.

Warren East, ARM CEO, was quoted in The Guardian, "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."

Thanks for some words of reason.

But then when it was clear that Apple buying ARM did not make sense, I see comments that it would make more sense for Intel to buy ARM. My immediate response was “You cannot be freaking serious!” Yes I have cleaned up my response prior to writing this.

If you think the blowback for Apple would be big, how much bigger do you think it would be for Intel? The company is dealing with a big enough anti-trust issue with AMD not only in the US but Europe and elsewhere. That is a big enough legal headache. Acquiring ARM would cause a paralyzing migraine.

Intel had the ARM license in the past. It picked up StrongARM with the Digital Equipment Corp semiconductor operations several years ago. This became XScale. Intel was not able to make a go of it and after investing hundreds of millions of dollars sold off XScale to Marvell.

The 80x86 is so much a part of Intel’s DNA. The Larabee GPU which appears to have been pulled back into development is 80x86 based. When Intel decided to go after the portable market for cell phones, smart phones and netbooks, it developed Atom, a scaled down 80x86 MPU.

Well if it were not for these rumors getting so much press I would have nothing to rant about. I have heard enough crazy rumors in my time in the industry that nothing should surprise me anymore. But I know it is just a matter of time before one will.