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mendyk 7/19/2016 | 8:48:08 AM
Re: Investment for the IoT future? ARM owners walk away from this with lots of money, which is the optimal result in our economic system. SoftBank holds the debt bag. One of the more creative pieces of analysis I've seen on this deal is the rationalization that ARM cost SB 30 or so percent less than it would have a year ago because of the devaluation of sterling vs. the yen. So, really, the 40 percent-plus premium paid is really like 10 percent. Numbers can be used to justify almost anything.
venumadhav 7/19/2016 | 3:33:37 AM
Re: Investment for the IoT future? Arm was doing ok, buy selling itself to softbank they seem to have invited uncertainity in terms of load of debt which softbank is carrying. This is unneccesary...




TV Monitor 7/18/2016 | 3:25:29 PM
I don't get it I think Chairman Son is losing his edge.

Son arrived at where he is today by making high risky bets. This was the only way a foreigner like him could get ahead in Xenophobic Japan.

When Son bought Sprint, that made sense because Sprint had tons of TDD spectrum at 2.5 Ghz that could be used to implement a cheap Chinese 5G TD-LTE network, while everybody else are forced to pay king's random to buy the only mmwave 5G tech that works at 28 Ghz that FCC released for US 5G services, Samsung 5G.

Purchasing ARM doesn't make sense, because all major customers are licensing the instruction set and not the microarchitecture of ARM cores designed by ARM. Apple, Samsung, Qualcomm, and AMD all use own-designed ARM compatible cores, and these instruction set license brings in pennies per device sold. So where is Son's billions in new revenues that IoT would bring in? A billion device sold might bring in $50 million in revenue if it is an instruction set license.

So I think this is a bad bet.
James_B_Crawshaw 7/18/2016 | 2:35:49 PM
Re: Investment for the IoT future? Hey! Hands of Greatish Britain Mr Brooks! 

I'll have you know the Dark Ages were a time of great enlightenment and learning in the British Isles. Yes, we didn't wash much but we were very good at wattle and daub architecture. As for anarchy in the UK, we already had that in the 70s but nowadays we are too apathetic for revolution. 
James_B_Crawshaw 7/18/2016 | 2:31:19 PM
Re: Investment for the IoT future? If Softbank doesn't plan to interfere then what is the rationale for Softbank to make the acquisition? Softbank's shareholders are perfectly capable of buying ARM shares if they like the IoT and server story. They don't need Softbank to buy the business for them at a 40% premium to the prevailing share price. Buying Sprint had some industrial logic but this (ARM) is about as synergistic as buying a baseball team. And yes, Softbank does also own a baseball team ...
brooks7 7/18/2016 | 12:40:54 PM
Re: Investing in data centers and in Britain Yep ARM has taken on Intel in the Data Center for 10 years or so.  Traction 0.  Value Proposition none.

The reason it works for Intel is that the hardware is cheap and available from lots of places.  People have been buying these things for years without any need for ARM.  So, ARM needs to produce servers that cost 30 - 40% less than Intel ones.  Call me when that happens.


Mitch Wagner 7/18/2016 | 12:26:47 PM
Re: Investing in data centers and in Britain Indeed, China and India produce a lot of smart engineers. R&D could be relocated. 
Mitch Wagner 7/18/2016 | 12:25:43 PM
Re: Investment for the IoT future? Yes, but Facebook and Instagram are a different industry from SoftBank and ARM. SoftBank will likely come to see ARM as strategic; hard to see how it will be able to resist meddling. 
inkstainedwretch 7/18/2016 | 11:28:34 AM
Investing in data centers and in Britain As Iain noted in his story, the ARM ecosystem is moving to secure a chunk of the data center server business (taking it away from Intel, which has a probably unsustainable near-monopoly in that area). Do not underestimate what a boon this could be to ARM (and any acquirer) if successful.

Re: Brexit / knowledge worker employment. Cheerleaders for globalism say there's nothing to be done about manufacturing jobs moving to countries where labor is cheapest; you just have to invest in knowledge workers, they say. But this maneuver should remind globalists that knowledge workers can reside literally anywhere. Iain notes this as well, but it's another point that should not be lost in the shuffle.

-- Brian Santo
iainmorris 7/18/2016 | 11:14:37 AM
Re: Investment for the IoT future? ARM has expressed quite a bit of concern about the impact of Brexit given the number of EU citizens it employs in Cambridge. However, it's also noted (as SoftBank will have done) that virtually all of its earnings are generated outside the EU. As a UK technology company that is also a global phenomenon, it is a pretty rare thing. Nevertheless, who is to say that its new owners won't shift R&D outside the UK if circumstances make it difficult to employ EU citizens in Cambridge? I'm not sure how binding these promises are to double the size of the UK workforce.
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