SOFTBANK’s $32 Billion Takeover of ARM

SoftBank Group Corp. unveiled its $32 billion takeover of chip designer ARM Holdings Plc, a deal that marks founder Masayoshi Son’s biggest gamble so far on the future of technology.

Son forged a career out of betting early on some of the pivotal technology trends of his time. Now he’s made the biggest bet of his life on a nascent concept known as the Internet of Things. His wager on ARM — the linchpin of the mobile revolution — is predicated on the notion that succeeding generations will grow reliant on appliances and gadgets that talk to each other and function free of much human intervention. For that to work, each of them must come with a microchip, and Son’s betting it’ll be an ARM design.

Son has his eye on a longer-term horizon. SoftBank’s progenitor has been at the forefront of technology for 35 years: he founded his company to capitalize on the early PC boom, backed web startups and e-commerce in China when they were still novel concepts, and challenged older wireless operators in Japan with innovative pricing plans.

Now he’s again staking his reputation on potentially the next technology revolution. By buying ARM, SoftBank is jumping to the top of the hardware supply chain and eschewing an increasingly bewildering array of devices — everything from a smart rice cooker to mini-robots. He’s angling for a slice of vital components in all that hardware. The concept could take off once ultra-fast fifth-generation broadband goes mainstream.

“If you are going to get into something like that to position yourself, it’s now,” said Shiv Putcha, associate director of consumer mobility and telecoms at IDC Asia Pacific in Mumbai. “The whole range of connected devices is already booming but it’s just the beginning.”

“5G is a good four or five years out and SoftBank themselves come from a telco background, so they know what’s coming.”

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