Apple, the tech giant behind the iPhone, iPad, and Mac, has signed a new long-term deal with Arm, the chip designer owned by SoftBank Group, for its chip technology. The deal, which was revealed in Arm’s initial public offering (IPO) documents filed on Tuesday, September 5, 2023, extends their partnership beyond 2040.
Arm’s IPO plans and strategic investors
Arm, which is based in the United Kingdom, owns the intellectual property behind the computing architecture for most of the world’s smartphones, which it licenses to Apple and many others. Arm unveiled pricing on Tuesday for what it hopes will be a $52 billion IPO, which would be the largest such deal in the US this year. Arm owner SoftBank Group plans to offer 95.5 million American depository shares of the company for $47 to $51 apiece, Arm said in a filing.
Apple was among a number of large technology companies that invested $735 million in Arm’s IPO. Reuters reported that Apple was among the strategic investors who agreed to buy shares. The deal disclosed on Tuesday was not mentioned in Arm’s previous IPO filing documents made public on August 21, implying that the deal was signed between then and September 5.
Apple and Arm’s long history and future prospects
Apple and Arm have a long history of collaboration. Apple was one of the initial companies that partnered to found the firm in 1990, before the release of its “Newton” handheld computer in 1993, which used an Arm-based processor chip. The Newton flopped, but Arm went on to become dominant in mobile phone chips because of its low power consumption, which helps batteries last longer.
Apple uses Arm’s technology in the process of designing its own custom chips for its iPhones, iPads, and Macs. Apple has been transitioning its Mac computers from Intel chips to its own Arm-based chips since last year, claiming that they offer better performance and efficiency. Apple’s latest iPad Pro models also feature its own M1 chip, which is based on Arm’s architecture.
The new deal with Arm suggests that Apple is committed to using its technology for its future products and innovations. Apple is reportedly working on developing its own cellular modem chips for its devices, which could reduce its reliance on Qualcomm. Apple is also rumored to be working on augmented reality glasses and a self-driving car project, both of which could benefit from Arm’s chip technology.
