Prompt Cast
The Story of ARM: From Acorn Computers to SoftBank's $32 Billion Acquisition
TLDR Acorn Computers created the ARM processors, which offer better performance, cost savings, and require less power. ARM's unique business model of licensing their instruction set has allowed them to be in 130 billion devices to date. SoftBank's $32 billion acquisition of ARM in 2016 saved the company from bankruptcy and enabled continued innovation in computing.
Timestamped Summary
00:00
SoftBank's $32 billion purchase of arm holdings, the primary component of every single one of our phones, is explored in this episode of Acquired.
06:10
Acorn Computers wins a contract from the BBC and government to create the BBC Micro, which becomes a popular computer in the UK, but they realize they need to create a more powerful professional computer to compete with the IBM PC.
12:23
Acorn Computers decides to build their own microprocessor after Intel rejects their request to be a customer, and they create a reduced instruction set computer based on a paper from UC Berkeley.
18:10
Acorn Computers creates a reduced instruction set computer (RISC) called the Acorn RISC Machine (ARM) that performs 80% of the instructions of the Intel x86 processors, but executes them much faster, leading to better performance and cost savings.
24:13
Acorn Computers develops the ARM processors, which not only perform better and cost less, but also require less power and can function without a dedicated power supply.
29:51
ARM was started as a joint venture between Apple and Acorn Computers to create a low power, high-performance chip for the Newton PDA, and without this project, ARM as a company would not exist and the devices we use today would look very different.
36:02
After the failure of the Newton, ARM's CEO Robin realized they could work with other partners to embed their core processor technology and develop customized silicon for different use cases, creating a business model where they receive upfront licensing fees, payment for engineering time, and a small royalty on every device shipped with their technology, resulting in ARM chips being in 130 billion devices to date.
42:01
ARM chips were able to penetrate the duopoly of Microsoft and Intel in the mobile market because they were able to run games and other software that previous processors couldn't handle, leading to the development of smartphones as we know them today.
47:51
ARM's IPO in 1998, in which Apple made a significant profit from selling their shares, saved the company from bankruptcy and allowed them to continue operating.
53:59
SoftBank's acquisition of ARM in 2016 was crucial for the company's future, as it allowed them to continue operating and benefit from their unique business model of licensing their instruction set and receiving a cut of every chip manufactured.
01:00:11
SoftBank acquired ARM for $32 billion in a quick and efficient deal, and this acquisition became the prototype for SoftBank's future investments through the Vision Fund.
01:06:29
SoftBank acquired ARM using a combination of cash from selling Alibaba and Supercell shares, a loan, and their ability to take on large credit lines, which allowed them to finance the deal and support ARM's future growth without being strategically or structurally disruptive to the market.
01:12:38
The SoftBank acquisition of ARM is seen as fortunate and value-creating for the world, as it allows for continued innovation and the production of IP that enables new possibilities in computing.
01:18:52
The SoftBank acquisition of ARM is seen as a potentially risky investment due to the gap between the purchase price and ARM's current revenue, as well as concerns about the company's ability to command value in the future and potential competition from new technologies.
Categories:
Technology
Business
