Is ARM's refocus a sign of an upcoming sale?

July 09, 2020 //By Peter Clarke
Opinion: ARM's refocus is good; suits a sale
ARM's decision to refocus on its core business of semiconductor IP creation looks like an about-turn. It is welcome but comes with numerous caveats.

The decision to pass the IoT Services Group over to SoftBank (ARM to refocus on chip IP, let go IoT businesses) for an undisclosed amount of recompense – if any – may seem like an admission of failure for the strategy laid out by SoftBank CEO and chairman Masayoshi Son, back in 2016, when he swooped to acquire ARM in 2016.

Perhaps it is and perhaps it isn't.

More importantly it may be that ARM is being put on a crash diet to make it more attractive for an IPO or a trade sale. And that would be an admission that whole ARM adventure with SoftBank has been if a not a failure, then a money-recycling irrelevance to the fundamental business of creating value and wealth through the application of technology.

First off it would seem to reverse the strategic direction that ARM has been travelling on for a decade or more; to keep one foot resting on strenght in semiconductor IP while swimming up the value chain towards operating systems, data and services.

So, if that direction was the right way to go throughout Simon Segar's incumbency as CEO of ARM, why is now the right time to turn about and refocus on semiconductor IP? Well I've already hinted at one possible answer.

It is undoubtedly true that many companies, having achieved mastery or even dominance in one area of endeavour, immediately try and conquer an adjacent, or even different, domain and often fail. At the same time those companies can take their eye off the "home turf" which is always evolving and throwing up new competitors.

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