Deal would be among Apple's most costly acquisitions ever and could ensure a steady supply of an expensive component for its iPhones.

Thomas Claburn, Editor at Large, Enterprise Mobility

December 13, 2011

3 Min Read

Inside Apple's New Grand Central Super Store

Inside Apple's New Grand Central Super Store


Inside Apple's New Grand Central Super Store (click image for larger view and for slideshow)

Apple is said to be negotiating the purchase of Anobit, a maker of flash memory for the enterprise and mobile markets.

Israeli news site Calcalist reports that Apple is in talks to acquire the company for between $400 million and $500 million.

Apple did not respond to a request for comment.

If the deal goes through, it looks to be the company's largest purchase to-date in absolute dollar terms. Adjusted for inflation, the company's $400 million purchase of NeXT in 1997 would be about $564 million in today's dollars, based on the Consumer Price Index.

Since it was founded in 1976, Apple has made 33 known acquisitions, relatively few compared to companies like Google, which acquired at least 57 companies--many of these deals involve small firms and are not known publicly--just in 2011. But lately, Apple has become more acquisitive: After several years with one or two acquisitions, Apple bought at least six companies in 2010.

[ Find out more about Apple and its effort to transform the way software is sold. Read Apple's Mac App Store Passes 100 Million Downloads. ]

Most of Apple's 2010 acquisitions--Quattro Wireless, Siri, Poly9, Polar Rose, and IMSense, with the exception of semicondictor company Intrinsity--have been related to competing more effectively in the smartphone and cloud services markets. But its interest in Anobit looks to be an effort to improve its supply chain advantage. Supply chain optimization was one of Apple CEO Tim Cook's main areas of focus during his tenure as COO.

NAND flash memory represents the largest component cost in the 32-GB and 64-GB models of Apple's iPhone 4S, according to iSuppli. Acquiring Anobit presumably would help Apple drive its manufacturing costs down and perhaps keep its competitors from benefiting from the company's unique Memory Signal Processing technology, which is used to make flash memory faster and more durable.

The move may also be driven in part by Apple's strained relationship with Samsung, which supplies Apple with NAND flash memory even as it defends against Apple's patent claims in court. Apple recently began shifting toward other suppliers of DRAM and NAND flash memory, according to Taiwan's DigiTimes. Samsung is an Anobit customer.

Anobit's 21 granted patents, with dozens more pending, almost certainly contribute to Apple's interest in the company. Apple has been particularly aggressive in its legal effort to prevent competitors like HTC and Samsung from selling what it characterizes as copies of its products.

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About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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