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Apple shocks industry with PA Semi buy!

April 24, 2008

According to The Unofficial Apple Web Blog (TUAW), Apple has stunned the industry by acquiring P.A. Semi, a Santa Clara based chip company founded by Dan Dobberpuhl, the former lead designer of the DEC Alpha and StrongARM processors, for US $278 million.

The Computerworld Blog reported that Apple had ‘shocked’ everyone with this move. P.A. Semi is a fabless chip designer that specializes in super low power PowerPC processors.

This move surely raises questions about Apple’s future association with Intel, which has been courting Apple since long to adopt its Atom low-power processor family. It also remains to be seen whether Apple will use these super low power PowerPC processors in embedded devices, such as high end iPhones, iPods, etc.

Interestingly, the PA Semi Web site is displaying a message: This account has surpassed its bandwidth allocation at the present time. You may reach the account administrator. Maybe, too many folks are trying to access the site to find out more about this company.

The Apple buyout of PA Semi was possibly first reported by Forbes. Since then a whole lot of articles have appeared on the Web.

According to the site, Apple spokesman Steve Dowling reportedly said, “Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans.” He is also said to have declined to comment on the value of the deal, which a person familiar with the deal suggested was done for $278 million in cash.

Apple later announced its quarterly earnings Wednesday. As per Apple’s financial results for fiscal 2008 second quarter ended March 29, 2008, the company posted $7.51 billion revenue and net quarterly profit of $1.05 billion, or $1.16 per diluted share.

These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.

Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. It sold 10,644,000 iPods during the quarter, representing 1 percent unit growth and 8 percent revenue growth over the year-ago quarter. Quarterly iPhone sales were 1,703,000.

As per another Forbes reports, Apple has promised to sell 10 million iPhones in 2008 on a call with analysts Wednesday. Watch this space, as Apple is surely going to be in news for most of this year.

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