Acorn Computers where once called the British Apple and one of the leading computer companies in the 1980s. They originally developed the processor designs that are now used in 98% of the world’s smart phones and about to make the next big technology revolution possible. Steve Furber and Sophie Wilson where the software engineers who designed the instruction set of the ARM processor which changed the world and led to the creation of the most successful British technology company ever. In November 1990 Advanced RISC Machines Ltd was formed to further develop the Acorn RISC Machine processor, which was originally used in the Acorn Archimedes and was selected by Apple for their Newton project. The project was a collaboration between Acorn Computers, Apple Computers and VLSI Technology. Acorn computers needed the partnership as they had run out of money to develop their new chip. ARM Holdings Plc listed on the London Stock Exchange and NASDAQ with a market valuation of £264 million in April 1998.
In July 2016 SoftBank announced it will acquire Arm Holdings Plc for £24.3 billion as they aim to become the leader of the “internet of things”. Arm founded 25 years ago and employee’s just 4,000 people is the largest acquisition of a European technology business. The company has tremendous operating leverage and licences its technology so earns on going royalties. The numbers are like no other company with revenue in 2015 of £968 million and a healthy operating income of £406 million. The excitement around the internet of things where everyday objects have network connectivity allowing them to send and receive data. Masayoshi Son the Chief Executive Officer of Softbank is making a big bet that the internet of things is going to be a much larger industry that analysts and the market are forecasting. If ARM controls this market and is it is as large as he is expecting then this could be a shrewd investment. Masayoshi has been right before with investments in Alibaba and Vodafone (Japanese arm). SoftBank has said they plan to create 4,000 new highly skilled jobs in Cambridge over the next five years. It therefore might be time to sit up and take notice of the “internet of things” and how this will feed a new ecosystem of opportunity.
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