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SoftBank jumpstarts IoT by buying ARM for $32 billion

by
19 July 2016



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Softbank’s CEO Masayoshi Son proudly showcases Pepper, a human-like robot.

The announcement that SoftBank will spend $32 billion to acquire ARM Holdings means the Japanese firm is buying the most important company in the world of mobile processors for smartphone and Internet of Things devices.ARM’s processors are in more than 95% of the global smartphone market. “From the iPhone and AppleWatch down to the cheapest Nokia phone out there, you can be pretty sure that your mobile device has an ARM-based chip inside,” says Forbes.

Reuters said, “Masayoshi Son said he had been following ARM for the last 10 years and decided now was the right time to invest in a firm that provides the technology in nearly all smartphones.” ARM’s architecture is designed to use as little power as possible which makes it similarly ideal for the new world of IoT devices that have processors and radios embedded in them to give them limited smarts and let them connect to the Internet.

ARM’s business model is to design the processor architecture and license it to companies such as Qualcomm, Samsung and Apple for production. Son said that the business model will stay the same, as will the company’s organizational structure and senior management and that their headquarters will remain in Cambridge, UK.

Son said that ARM plays a central role in the shift to the Internet of Things (IoT) – a network of devices, vehicles and sensors that collect and exchange data.

“ARM will be the center of the Internet of Things, in which everything will be connected. IoT is going to be the biggest paradigm shift in human history (and) we have always invested at the beginning of every paradigm shift.”

This acquisition will be SoftBank’s largest takeover to date and their first in the semiconductor industry. Other properties of the SoftBank group include the Japan telecom giant SoftBank, U.S. carrier Sprint, a stake in Chinese e-commerce giant Alibaba, and the SoftBank Robotics venture producing the humanoid robot Pepper.

ARM is headquartered in the UK. British politicians have objected in recent years to some international takeovers and since this deal will be the biggest thus far it remains to be seen whether it will be approved or some other company will step in. According to an article in the NY Times,

“ARM and SoftBank have an overlap on how we see the future,” Simon A. Segars, ARM’s chief executive, said in an interview. But he left the door open for another offer. “Now that the offer is in the public domain, if anyone wants to make a counteroffer, they are more than welcome to do so,” he said. “There’s always a possibility of someone counterbidding.”



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Frank Tobe is the owner and publisher of The Robot Report, and is also a panel member for Robohub's Robotics by Invitation series.
Frank Tobe is the owner and publisher of The Robot Report, and is also a panel member for Robohub's Robotics by Invitation series.





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