Apple could be preparing to takeover Cambridge-based chip manufacturer ARM.
Rumours circulating in the City of London, on the back of spectacular Apple profits announced earlier in the week, sent ARM shares up sharply yesterday.
Apple is ARM's biggest client and with the launch of the iPad, Apple may be keen to get tighter control of core components.
London's Evening Standard yesterday quoted one trader saying "A deal would make a lot of sense for Apple. That way, they could stop ARM's technology from ending up in everyone else's computers and gadgets."
City traders believe a bid would be at around 400p a share, valuing ARM at more than £5.2BN.
Veteran Analyst Richard Holway of TechmarketView said, ARM processors were used in the iPhone, iPod and iPad.
"I have no idea if there is any validity in (the rumours) but makes sense as Apple designed the main chip for the iPad inhouse and doesn't want to see its technology used in other competing products."
In a bid to take on ARM's domination of the smartphone market, Intel used its developer forum last week to show it could port Google's Android mobile operating system to smartphones based on its Atom microprocessors.
Comments
Arcless said: Arm designed RISC based processors outsell Intel 101This would not just be bad for the Mobile Phone market If Apple stifles their output it could cause major repercussions in almost all modern electronics Games Consoles Digital Set Top Boxed MP3 Players DVD playersWorse still is the effect on the UK this little company is a major innovator it was their asynchronous 32bit processor that took mobile phones from 8 hours standby to several Days They are the microprocessor industry leader in everything except the home computer market
Mark Simpson said: This would be bad for the mobile phone market given up until now ARM have been fairly liberal about who they sell toThe Apple deal would stifle competition in the market