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The word on the street (via Reuters (s tri) via Israel-based Calcalist) is that Apple (s aapl) is going to buy Israeli maker of flash memory technology Anobit. The price is said to be between $400 million and $500 million, a hefty chunk of change for a lot of companies, but for those with $81 billion in the bank, a drop in the bucket.
Apple hasn’t confirmed or commented on the deal to buy the 200-person company. Anobit investors haven’t returned requests for comment, nor has Anobit.
- Apple is the largest buyer of flash memory in the world. Apple scoops up enormous amounts of NAND flash each year because its most popular products are dependent on it. Anobit’s chip uses Memory Signal Processing, a set of algorithms that improve the endurance and performance of flash and can bring the overall cost down.
- Apple’s philosophy is “own and control.” Anobit’s chip is already used in the iPhone, iPad, and MacBook Air, according to reports. Those are the three products most crucial to Apple’s future. It is no coincidence, then, that Apple would want to ensure that a technology that is critical to its most important devices is under its control. It’s the same attitude behind the purchase of P.A. Semi — which Apple bought in 2008 to bring its custom design services for mobile chips in-house — and the basis of Apple’s overarching philosophy behind all its devices: Own the software and hardware and the critical things that make a product successful, and you control your ability to produce it and how users experience it.
- Apple wants to differentiate its products in a tangible way for consumers. Apple cares about the end-user experience a great deal. It’s not a surprise then that it would consider ensuring access to a technology that can make flash memory embedded in devices speedier and last longer, because that means an iPhone/iPad overall will be faster and have a longer lifespan. This philosophy led to Apple’s purchase of chip-company Intrinsity last year. Intrinsity made technology that improved the overall processing speed of ARM-based (s armh) chips, such as Apple’s A5.
- Apple does make non-software acquisitions every once in a while. P.A. Semi and Intrinsity mentioned above, were some of them. So was graphics chipmaker Raycer Graphics in 1999 — and the purchase that was most critical for getting the company where it is today, Steve Jobs’ NeXT in 1997.