By Avigayil Kadesh

 

Why did Apple fork over somewhere between $390 million and $500 million to purchase Israeli flash memory king Anobit?

 

The question was all over tech sites in January, when the US electronics firm confirmed the deal that had been rumored widely.

 

Apple often scouts out startups that can offer advances to bake into its popular products, and was already taking advantage of Anobit memory signal processing (MSP) technology to boost the speed, endurance and performance of flash storage systems. But Apple had never before acquired an Israeli company.

 

However, flash memory is such a pivotal component of hard-drive-free toys, such as the iPhone, iPod, MacBook Air and iPad, that it’s really no wonder the multinational electronics and software maker chose for its second most expensive acquisition a company that the Israeli financial daily Globes named one of the most promising startups for 2011.

 

Anobit holds about 95 patents for flash and other technologies. As Apple continually strives for dominance in the device market, the acquisition of Anobit could give Apple the edge when the next generation of smart phones and tablets hits the market.

 

Anobit’s success in the fabless semiconductor field, which deals with high-density NAND computer storage chips, is just one further example of an Israeli invention. Flash memory, which allows devices to hold onto information even when not powered up, was innovated by Eli Harari, a former Intel-Israel engineer who went on to found SanDisk.

 

What took so long?

 

The tech blog Israellycool points out that Apple has lagged behind corporate giants such as Microsoft, Intel, IBM, Oracle, Motorola and Google in building up an Israeli presence on both the consumer and tech side.

 

“Apple has neglected Israel as a market for its computers for years despite Israel leading the world in per-capita computer use. Apple’s market share in personal computers is much lower in Israel than in the United States or even Europe, and support for Hebrew is not as comprehensive as it is on Windows,” the blogger writes.

 

Whatever the reason for that gap, it appears to be closing. Around the same time as the Anobit acquisition announcement, Apple was reported to be hopping on the bandwagon of companies that have opened research-and-development centers in Israel.

 

TechCrunch speculates that Apple was motivated to buy Anobit not only for its flash memory controllers, but also to add the Israeli company’s 160 chip engineers to its own chip engineering crew of 1,000.

 

“Apple designs its own chips, and then farms out their manufacture to semiconductor fabrication plants around the world. So with a relatively small team of chip designers, it’s been able to replace what it used to rely on Intel for (and before that, IBM) with its own in-house team focused on creating chips for post-PC devices.... By designing its own chips and building out a world-class chip engineering team, Apple is investing in its ability to keep creating more post-PC devices for years to come,” according to the popular blog.