Forget about Apple buying AMD, there are persistent rumours in the square mile that Apple is looking to acquire ARM Holdings, the owners of the ARM IP, which is found in almost all recent smartphones and many feature phones as well.
ARM Holdings which only recently joined the FTSE100 has apparently been valued at $8 billion by Apple and the rumours have prompted a rally around the shares of the Cambridge-based company which rose by eight percent.
Apple sits on nearly $42 billion worth of cash and has aggressively invested in companies that research and develop CPUs and related products.
It has acquired P.A. Semi back in 2008 followed by a significant investment in Imagination Technologies and lastly, a few weeks ago, the purchase of Intrinsity, another chip startup.
Buying ARM though would be an altogether different proposition, similar in impact to a scenario where HP or IBM buys Intel, except that in ARM's situation, there's no AMD for mobile phone manufacturers to fall on.
In effect, buying ARM could prove devastating to the entire mobile phone industry as the consumer electronics giant could stop development and raise the royalties paid by manufacturers such as Nokia or Samsung.
Furthermore, ARM's acquisition would give it an insanely huge advantage when it comes to access to future roadmaps, technologies and directions.
ARM products normally take several years before they arrive on the market and have unusually long shelf lives compared to say an Intel CPU.
Hours earlier, Google announced that it had purchased Agnilux, a secretive hardware startup launched by former P.A. Semi engineers, which some say could provide Google with the necessary know how to launch a whole new range of products.