News: 1594881244

And the first thing the proud new owners do is decide to practically squeeze the life out of it, to extract more eggs, then they wonder why it's suddenly stopped laying.

Penguin icon for obvious reasons.

Yes, groups like SoftBank aren't interested in sustainable business models, just as much return as they can get in the short term, regardless of whether it kills the host in the long term.

Not sure if that is entirely fair for SoftBank as they have a stated 300-year mission (or is that Star Trek)

Having said that, what was Mr. Son smoking when he invested so heavily in WeWork?

Next they'll be wondering why they can't achieve a good price if they do indeed try to divest. The effect of price rises won't be immediately apparent while current customers investigate and adopt alternatives (if suitable ones are available), but in the medium term this could have a noticeable impact on ARM's revenue stream.

Heck, if enough customers jump to the same alternative, that could fund further improvements and give ARM a proper fight...

There's always something to look forward to ;-)

I suppose the inflexibility of WeWork and Uber revenue is obvious even to beancounters, Arm less so. I wonder if they've considered the possibility that having had a lot of money to splash around might have made them a tad too careless and that if they want to find out who's responsible for poor ROI they should look for a mirror.

On an entirely disconnected topic do we have any idea when the HP verdict is due?

6.4bn chips, $1.8bn in licence fees & royalties.. $32bn seems reasonable..

Or not. WeWork & Uber seemed more reasonable as they were more of a punt into disruptive models, with potential for big earn-outs. Hence all the hype, until that started generating tricky questions like 'when will you be profitable?', and 'how are you burning so much cash?'. And I guess some interesting cultural exchanges, ie traditional Japanese conservativism vs Silicon Valley exuberance. Never mind the P&L, look at the PPT showing spectacular growth!

Arm should have been a bit more obvious given market maturity, competition and revenues being relatively inelastic. So like the article says, customers keep using Arm until the cost makes them look for alternatives.. Which is business 101. But then so is valuation, like traditional N x Revenue, and Softbank isn't alone in re-imagining company valuations. See Tesla for more info. I'm guessing their decision was just based on device count, and an assumption Arm's customers could be squeezed into paying $1/device royalty... And I'm guessing Softbank didn't ask Arm's customers whether they'd be willing to pay that.

Careful! I'm a big fan of ARM, the low power ones are very low power, the fastest ones are quite fast while still having excellent performance per watt. BUT, for a lot of devices it's just a matter of needing some kind of CPU that runs Linux (usually, but WindRiver or VXWorks or something possibly.) MIPS is kind of dreary (usually not even an FPU) but plenty of access points and such have them, RISCV is completely free and has a full Linux and toolchain (GCC etc.) support. Apparently (at higher power points) the POWER CPUs are coming back into their own.

One of the things that has kept ARM successful for so long (Qualcomm does the same thing really) is to make sure to keep their various prices and fees high enough so they are rolling in the dough, but low enough so it's not seriously worth redesigning existing products to switch CPUs, probably not worth looking into other CPU designs for future designs either, or god forbid worth it for them to roll out their own CPU designs to potentially compete with ARM.

Far be it from me to write a "me too" post, but I came here to say pretty much the same thing. I have followed the progress of ARM since the Acorn days (being the owner of an Archimedes) and felt proud to have been a part of something that the UK can claim has been a roaring success rather than "invented here, monetised elsewhere" as so often seems to be the case.

I had thought that following such farces as the Cadbury sale, the UK government was beginning to understand that raw capitalism wasn't always in the country's best interests, but the sale of ARM to Softbank seemed to prove otherwise.

I'm currently working with ARM M0 processors in the BBC micro:bit and some Adafruit Feather devices, and having previously worked with the older Atmel-based Arduinos, the extra "elbow room" is fantastic (compare the price and performance of a "Mega 256" with a "Feather M0"). It would be a shame if the micro:bit increases in price. I hope that rather than squeezing the golden goose (as someone else has said), ARM can find a new owner who understands the business and gives it the freedom to carry on in the way that has been successful until now.

Not that I don't want competition! RISC-V is very interesting, but as you point out, one thing that no other vendor seems to be able to do (yet) is to produce largely compatible devices across such a huge range of price and performance.

M.

Honestly ARM is not a great investment from an ROI perspective with current expectations from investors (this includes anyone with a pension/retirement account). The premium paid by Softbank is a bit too high.

So the best thing is to probably for Sotbank to float it back on the stock market?

Ive always maintained that any mega multibillion pound/dollar merger/takeover is NEVER EVER in the interests of the consumer. They end up paying for such indulgences. Return on investments demands (at premium prices) is thus a one way price rise street, for consumers.

It is solely engineered (pun intended) by the stockbrokers for the benefit of themselves & shareholders, by pandering to the egos of CEOs, who have spare cash OR lenders who are happy to leverage such deals and earn fat commisions. Cash up now and debt fill the company balance sheets ! Its a game played over and over again in many scenarious worldwide, with many examples.

Witness VirginMedia takeover by Liberty Global. How many price rises since takeover? Boots prices after takeover? eg. current own brand hayfever generic 7 tablets being sold for £4.95 in their stores, when you could buy 14 generic tables in the next door poundland for £1. AOL / Time merger. What happened? Dixons/CPW ! AFter collapse of Comet, they had no high street competition, YET? The greed has killed the golden goose as mentioned in above posts.

Games played by big boys.eh

I'm not sure that I've ever seen it to the advantage of the company that has been taken over, either.

Businesses that get acquired are of two kinds

Those that are dying themselves - so a shit show after isn't a surprise. All your examples are in this category.

Those being acquired for a ridiculous multiple such as this ARM acquisition.

Or put another way, a company with a good product at a fair price isn't going to be up for sale without the ridiculous multiple.

Which I suppose is at it should be? The dying business would go bust sooner.

Let market competiton deal with prices - just like walking to poundland did for the hayfever tablets.

The consumer benefits - via pension pot valuation and maybe transaction stamp duty?

Asset stripping and LBO are the things I think should be stopped - here it is neither yet.

The positive of Softbank is that ARM went on a *massive* hiring spree after the acquisition - it seemed fishy (I know some terrible political types that got hired). It looks like Softbank don't know what they are buying with their yen carry trade.

Risc V might be fashionable and the "open" community's darling, but there is only one decent source for production level silicon exists , SiFive.

MIPS is relatively cheaper, and more regular and used in great variety, used in the past in many routers, game computers, settopboxes and even microcontrollers using it exist (e.g. PIC32).

I'd at least expect the various ARM license fugitives to be divided over the two.

I think in all honesty MIPS is looking a bit dead in terms of future generations using it. Sure it's still out there in a load of chipsets...

...but university courses are teaching RISC-V as an example CPU architecture now as it's pretty close to MIPS and all open-source and royalty-free yadda, yadda. In fact, the Berkeley team came up with RISC-V because they didn't want to teach MIPS internals any more, Arm wouldn't provide an academic core they could pull apart in an open way, so they made their own.

If you want to go beyond FPGAs and simulations, RISC-V does have a downside in that you're fairly limited for SoC suppliers. SiFive, Greenwaves, Microchip, Kendryte and NXP spring to mind, though.

C.

I get the impression that MIPS, in the form of Loongson, is alive and well in China.

"Arm wouldn't provide an academic core they could pull apart in an open way, so they made their own."

Didn't anyone learn anything from Microsoft?

This is exactly what I expected to happen. I could see the bridge was out before the train even left the station. The only thing I wasn't sure of was the timeline.

If Softbank is trying a Martin Shkreli style stunt, they appear to have missed the fact that the Shkreli sw*ne did it with customers that had nowhere else to go and could literally die without the medications he got his hands on.

There are alternatives to Arm. They're not used because licensing Arm is more cost effective, but shift that balance and you may find yourself with a rather costly hole in your portfolio..