(Image courtesy of CNBC)

Want a perfect way to fend off your mobile competition? Buy the company that licenses the majority of the world’s mobile chip designs.

AppleInsider is reporting that may be exactly what Apple is looking to do, with the Cambridge, England-based ARM Holdings in their acquisition crosshairs. “Apple is ARM’s biggest customer and speculation is that the iPad maker wants to take chip design in house,” claims a new report by The London England Standard.

“A deal would make a lot of sense for Apple,” the report continues. “That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.”

ARM’s public shares recently “shot up 8.1p to 251.1p” on the British stock exchange, and according to the Standard, “traders reckon a bid would come in at around 400p a share, valuing ARM at more than £5.2 billion [$8 billion US]."

If the rumors are true, Apple will have come full circle: ARM was originally founded in 1990 as a partnership between Apple, U.K. computer maker Acorn and chip fabricator VLSI Technologies. In those days, Apple’s main interest was in adapting Acorn’s RISC processors for the company’s new Newton Message Pad.

When the Newton was killed off in the late ‘90s, CEO Steve Jobs started unloading Apple’s shares of ARM during their darkest hour in an effort to balance the struggling company’s books. Apple then returned to ARM again in 2001 with the original iPod, and has continued to use the company’s technology ever since in everything from iPods, AirPort base stations, the iPhone and most recently, the iPad.

Coupled with what appears to be Apple’s acquisition of chip maker Intrinsity, another acquisition of ARM would indeed put Apple in the fabled cat bird’s seat, as the saying goes -- suddenly in control of a large percentage of the world’s mobile chip designs. ARM only licenses its chip designs, as do Intrinsity and P.A. Semi, with other companies actually building the chips.

Apple and others currently pay royalties to ARM for use of their chip designs; however, if Apple acquired ARM, it could choose to raise those licensing costs for competitors or even remove ARM designs from the market completely and keep them totally in house.