Imagine a future where your fridge, your washing machine, even your hairbrush, is a computer. Everyday appliances, all of a sudden transformed into intelligent, thinking and analytical machines.
And then think – how much would you pay to own the technology behind those devices? That might help to explain why Softbank’s eccentric chief executive Masayoshi Son is paying close to a 50% premium for the UK’s ARM Holdings.
ARM doesn’t make the chips that will eventually go into some of these devices, but it does design many of the chips used in smartphone devices (Apple and Samsung for instance) and other sensory devices today.
ARM makes its money from charging a small royalty on its intellectual property. “Softbank’s acquisition is a huge bet on the future,” says Marc Einstein of Frost & Sullivan in Tokyo.