Why Apple likes ARM

April 22, 2010: 1:09 PM ET

Apple's A4 chip, which made its debut in the iPad, uses ARM technology. Rumor has it that Jobs & Co. could make a bid for the Cambridge, UK company. Photo: Apple.

Apple is sitting on a heap of cash – more than $40 billion at last count – and the big question has been what the company will do with it. Investors in London this week are buzzing about one possibility: It might buy ARM.

ARM (ARMH) shares have shot up this week on the speculation, bringing them to levels they haven't seen since 2002. As of now, it looks like it would cost a suitor more than $8 billion to bag the company.

So what gives? Does Steve Jobs really want to fork over billions of dollars for this company? More

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