We believe that Apple buying ARM Holdings for $8 billion would be the best decision ever taken by the Cupertino-based company and one which would deal a fatal blow to the competition.
Apple's iPhone has overtaken the Mac range as the main generator of revenues for the firm and although the acquisition would be Apple's biggest ever, dwarfing the $404 million it paid for NeXT, the long term implications are enormous.
Here are four reasons why we need Apple need to buy and will eventually buy ARM.
(a) Android Threat
Android is the single biggest threat to the iPhone right now, period. It is not surprising that Steve Jobs said back in March that Google wants to kill the iPhone and both companies have been at loggerheads either way. Getting ARM would stop the Android momentum completely as there aren't any equivalent to AMD in the mobile processing market.
(b) Windows Threat
Ditto for Microsoft and its mobile Windows platform. Windows Mobile 7 looks very promising and the integration Microsoft has achieved between Bing, Xbox Live and Zune is surprisingly good. Switching from ARM would be absolutely devastating for Windows Phone 7 and the slew of smartphones that are supposed to be launched for the platform by the end of the year.
(c) Opportunity Cost
Buying ARM will cause Apple's share prices to rise significantly while those of companies in the mobile industry are likely to go down as investors question the short term survival of the players like Palm or HTC. Investors will seek other companies to invest in and are likely to choose Apple - because it is more stable - and will cause its shares price to rise.
(d) Consumer Electronics
ARM will provide Apple with a complete architecture to develop an platform that can span from a remote control to a super computer. We already know that ARM's Cortex processors can scale to multi processor levels and are significantly more energy efficient compared to the x86 family. Indeed, ARM could have a processor family to rule them all and one on which it has complete control.