Solution Providers: SoftBank's ARM Buy Will Put Pressure On Intel's IoT Play

Solution providers say that SoftBank’s acquisition of semiconductor design company ARM will have a ripple effect across companies investing in the Internet of Things – particularly Intel.

SoftBank, after disclosing the company’s plans Monday to acquire ARM in an all-cash transaction valued at $32 billion, pledged to invest more in ARM and help the company double its workforce over five years – giving the chip company a boost in the Internet of Things market that could place pressure on competing chip companies such as Intel.

’It will be interesting to watch ripples in how the mobility space approaches their respective IoT strategies,’ said Douglas Grosfield, founder and CEO of Five Nines IT Solutions, a pioneering Kitchener, Ontario-based strategic service provider. ’The ARM acquisition is interesting on several fronts in that not only does it change the competitive landscape in the IoT market from Intel's perspective, but also that the same Japanese organization that owns Sprint is buying ARM.’

[Related: 6 Things To Know About SoftBank's Blockbuster Acquisition Of ARM]

Cambridge, U.K.-based ARM got a head start in the mobile segment and its chip designs are in most smartphones, tablets and mobile devices across the world. The company also has placed big bets on the Internet of Things as it devises chips that use less power so they can be used in smaller gadgets or devices.

Meanwhile, Intel has been hitting the Internet of Things fast and hard. CEO Brian Krzanich this year laid out the company's future as a cloud, IoT and connectivity source as it moves away from dependence on the PC market.

The Santa Clara, Calif.-based company's first-quarter earnings report revealed that its Internet of Things segment grew 22 percent over the year-earlier quarter.

’Intel certainly has engineering, manufacturing capacity, and the ability to create new product categories which are vital to IoT. ARM will now have more resources for investment and access to different areas of expertise such as with cellular infrastructure from SoftBank’s other lines of business so that makes the new ARM more capable,’ said Kent Tibbils, vice president of marketing at ASI, a Fremont, Calif.-based Intel system builder. ’Ultimately, you have two companies with different strengths competing to build a market and at the end of the day that will benefit everyone.’

Intel’s Internet of Things platform rests on its low-power silicon Intel Quark processors, free cloud-connected multi-architecture operating systems, and an open-source project, Trusted Analytics Platform, for secure big data analytics applications in cloud environments.

Meanwhile, ARM's Cortex-R and Cortex-M designs present opportunities in the smart automotive industry in particular, and its TrustZone technology is essential for IoT device security, according to Tokyo-based SoftBank.

’ARM was going to be a major competitor in the Internet of Things market whether they were purchased by SoftBank or not, so what remains to be seen is what advantages do the two companies now have that they can bring to this emerging industry,’ said Tibbils.

The acquisition comes amid a slew of Internet of Things-related purchases in 2016, as more large companies dig into the emerging market.

According to a study released by Strategy Analytics in April, there were nearly two dozen major IoT-related mergers and acquisitions in the first four months of 2016.

"I don't think consolidations [in the IoT space] will slow down until the cement starts to harden a little bit," said Patrick Moorhead, president and principal analyst of Moor Insights & Strategy.

Other IoT-related acquisitions in 2016 include Microsoft's acquisition of Italian IoT service company Solair, Cypress Semiconductor's move to acquire Broadcom's wireless IoT business, and Cisco Systems' acquisition of cloud-based IoT provider Jasper.