From the beginning, it was hard to get anyone to care about this amazing technology. A few months after the first ARM chips had shipped, Acorn Computers' Steve Furber called a tech reporter and tried to get him to cover the story. The reporter replied, “I don’t believe you. If you’d been doing this, I’d have known.” Then he hung up.
As Acorn struggled, Furber tried to imagine how the ARM chip could be spun off into a separate company. But he couldn’t figure out how to make the business model work. “You’d have to sell millions before royalties start paying the bills,” he said in an interview. “We couldn’t imagine selling millions of these things.”
The future looked bleak—until a representative from another computer company walked through the door. A little company called Apple.
A new company
How had Apple heard about ARM in the first place? Two engineers in Apple’s Advanced Technology Group, Paul Gavarini and Tom Pittard, had built a prototype computer called Möbius. It used an ARM2 chip and ran both Apple ][ and Macintosh software, emulating the 6502 and 68000 CPUs faster than the native versions. Upper management at Apple was confused by this machine and quickly killed it, but Gavarini and Pittard kept beating the drum of ARM at internal presentations, showing impressive benchmarks when running LISP.
LISP was a heavyweight language, and Apple was using it internally to test new graphical interfaces. But it was considered too bulky for embedded applications. When Apple veteran Larry Tesler saw these benchmarks, a lightbulb turned on in his head.
Tesler had just taken over the Apple Newton project, and he needed to replace its slow and buggy CPU, the AT&T Hobbit. The ARM chip looked like a winner. Not only was it a speed demon, but its incredibly low power draw made it ideal for the handheld Newton device.
Tesler arranged a meeting with the ARM team, and he liked what he saw in their road map. But there was a problem. Apple was a computer company, and Acorn was a direct competitor.
This set the stage for a fateful decision. The ARM employees wanted to be free from Acorn’s declining fortunes. Acorn’s majority owner, Olivetti, was more interested in making IBM PC clones. VLSI Technology, the silicon foundry that manufactured the ARM chip, wanted more customers. And Apple wanted to license the chip. Spinning off ARM was in everyone’s interest.
In November 1990, a three-way deal was reached. Apple invested $3 million in cash for a 30 percent stake. VLSI invested half a million, plus its knowledge and tooling. Acorn transferred all its ARM intellectual property and twelve employees, valued at $3 million. At Apple’s request, the new company was renamed Advanced RISC Machines. ARM was now on its own.
A new leader
Saxby was born in 1947 in Chesterfield, England. As a child, he was fascinated by electrical wiring, and as a teenager he started his first business, repairing radios and televisions. He went to university in Liverpool, studying electronic engineering. After he graduated in 1968, his first job was helping design England’s first transistor-based television.
He joined Motorola in 1973 and was quickly promoted to sales engineer. This meant his job was to travel around to the firm’s customers and help them build their designs using Motorola products. When he moved to the CPU division, he thought his customers would all be mainstream computer companies. To his surprise, most people wanting Motorola CPUs had niche embedded applications in mind. At one point, he wrote a proposal for Motorola to spin off its CPU design team and offer design services, but management didn’t like the idea.
After Motorola, Saxby joined a startup called ES2 that was trying to develop a new silicon chip manufacturing technology. ES2 had built some test chips for ARM, so Saxby already knew about the company. But when he was asked to join ARM as its first CEO, he doubted he was the best man for the job.
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