Deal unlikely because of industry implications

ARM stocks have risen by as much as 32 percent in Thursday stock trading, apparently on the basis of resurgent rumors of an Apple buyout bid, says Reuters. Though Apple has not yet been reached for comment, a spokeswoman for ARM has denied the existence of any talks, and reiterated statements by CEO Warren East, saying that a takeover would not make any sense. A Panmure Gordon analyst suggests that investors are simply being bullish on ARM's prospects, given its technology's importance in current and forthcoming tablets, like the iPad.

The iPad's A4 processor is a modified ARM design, and in theory Apple could create even more specialized chips if it owned ARM's assets. ARM licenses out architecture rather than manufacturing it however, and combined with the customization already afforded to businesses, there may not be much incentive to spend the money needed to buy the company. There is also the possibility of legal concerns, as Apple would either have to keep licensing out processors or risk lawsuits and even antitrust complaints.

A modified version of the A4 is being used in the iPhone 4, which ships on June 24th.

By Electronista Staff

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Investor, industry, ARM, Apple, A4