Why isn't Apple Inc buying ARM

What the ARM takeover by Nvidia means for Apple

Jason Cross

Nvidia plans to buy a company that is built into every mobile processor in the world, including Apple. There is no need to panic.

Nvidia announced over the weekend that it had reached an agreement with ARM and Softbank (the current owner of ARM) to buy ARM for stocks and cash worth up to $ 40 billion. This is a big deal that could shake up the semiconductor industry. Nvidia is the dominant force in the field of high-performance graphics and increasingly also in AI and machine learning. ARM licenses IP, CPU, and GPU designs to many companies, including almost all smartphone chip manufacturers.

This also includes Apple: Almost all of its products now contain ARM-compatible CPUs. The iPhone, iPad, Apple TV, Apple Watch and Homepod all have processors that execute the ARM instruction set. Modern Macs have the ARM-based T1 or T2 processors in them to perform some tasks, and Apple has announced its intention to move away from Intel in favor of ARM-based processors of their own design.

So what does it mean for Apple that Nvidia is buying ARM? This will not change any product in the short term. We shouldn't expect a dramatic shift in the coming years either. Do not panic! It's unlikely that this deal will change Apple's products anytime soon.

In the short term: everything as it was

First, we should note that just because Nvidia reached an agreement with ARM and Softbank, it is not a done deal. It's a merger of two massive and influential tech companies that have to overcome regulatory hurdles from the UK, the European Union, China and the US, which could take a while.

Chip design licenses are usually long-term, multi-year, cross-product agreements. Even if Nvidia wanted to turn the tap on Apple or other licensees, it would be years before it affected products we bought. It's not clear what Apple's current license agreement with ARM looks like, but it almost certainly covers at least products for the next three or four years.

ARM licenses come in two versions. A company can license entire CPU core and GPU designs (ARM "Cortex" CPUs and "Mali" GPUs). Many companies do this and build them into their own chips, often with optimizations or modifications. When Apple switched from using Samsung processors to its own brand new A4 processor in the iPhone 4, the company relied on licensing ARM "Cortex" CPU designs and GPU designs from PowerVR.

One can also license the ARM code and design a compatible CPU from scratch. Apple has been doing this for years; the A6 processor in the iPhone 5 was the first to feature an Apple-designed CPU, and the company has never returned to licensed CPU designs since.

Nvidia CEO Jensen Huang has publicly stated that Nvidia will keep the ARM division separate from Nvidia's graphics unit and will continue ARM's open licensing agreements. Regulators would almost certainly insist as billions of smartphones around the world rely on ARM licenses. As long as ARM continues to license its instruction set under Nvidia, nothing would actually change for Apple.

In the long term, Apple products will remain Apple products

If there are significant changes, they will likely not show up for years. Huang has announced that it intends to make some of Nvidia's graphics and machine learning programs available for licensing along with ARM's current offerings. Future smartphones or tablets from Qualcomm or Samsung or Huawei could very well have ARM-based CPUs along with GPU and ML technology from Nvidia.

Apple already delivers products with GPUs and machine learning hardware of their own designs. Macs rely on Intel graphics processors built into processors or discrete AMD graphics processors, but both will slowly fade in the next few years as Apple moves the Mac lineup to its own silicon.

If necessary, Apple could potentially modify its silicon to work with an instruction set of its own design. It would be tedious and require developers to recompile their applications, but Apple's isolated ecosystem makes it a lot easier to do than it would for other smartphone and PC manufacturers. Apple doesn't have to worry about compatibility with a broad Windows or Android ecosystem from many manufacturers. It remains in full control: Apple only has to take care of Apple.

One possible long-term scenario is that a combined Nvidia / ARM company will be able to make products that compete more effectively with Apple's. If the performance and features of the licensed CPU and GPU cores are much better, and they target the type of laptops and desktops currently dominated by Intel and AMD, then Apple may not have the significant advantage it has today .

But such a scenario wouldn't necessarily change Apple's plans. It is already years ahead of a hypothetical delivery of Windows laptops and desktops by ARM / Nvidia. If ARM's chips, supported by Nvidia GPU technology and licensing, start producing Windows laptops with excellent performance and killer battery life in 2024, Apple will have been building ARM-based computers for several years .

In short, Nvidia's purchase of Arm is likely to have less of an impact on Apple and its products than Apple's competitors in the smartphone, PC, and wearables markets. Even then, we are still years away from significant changes.