ARM: Moving on from mobiles
Published: 03 Apr 2006 13:40 BST
What's the most dominant company in the technology industry? Microsoft? Google? Intel? How about a 1,300-employee British company named ARM?
ARM has created the chip design that is at the centre of virtually every mobile phone on the planet. About 98 percent of all mobile phones use at least one ARM-designed core on their motherboards, according to research from the analyst firm The Linley Group.
That market stranglehold has put ARM in an odd position: Once a company reaches such a lofty market share, there's only two places left to go — down or to another market. So ARM is ratcheting up its efforts to become the chip-design heart of other consumer gadgets such as set-top boxes, digital cameras, printers, and digital televisions.
Of course, ARM has been selling to consumer electronics makers for several years, and the non-mobile phone business already counts for more than a third of ARM's sales. But ARM chief executive Warren East wants a lot more than that. Though he won't give a time frame, he wants consumer electronics to eventually account for half of all sales.
"Mobile phones are growing at a healthy rate, but we've said for many years that we want to be the architecture for the digital world, not just mobile phones," East said in an interview with ZDNet UK sister site CNET News.com.
There are big challenges ahead before that can happen. Like all chip architectures, ARM's designs require software to be written specifically for those chips. Companies that have already developed software for competing architectures will be reluctant to switch without a clear case for ARM's technology.
Being the upstart is a switch for Cambridge-based ARM. Its main business is designing processor cores that run applications on electronic devices. ARM licenses individual cores to companies that use those designs to build their own chips. It also sells architectural licenses to larger companies like Texas Instruments or Intel, which use the ARM architecture throughout generations of products.
Some mobile phones use up to two or three chips per phone based on ARM cores, said Linley Gwennap, principal analyst with The Linley Group. "Anonymous ubiquity," East calls it. ARM had $418m in revenue during 2005. That included $90m generated by the chip design company Artisan, which ARM acquired the year before. Not including that $90m, ARM's processor division still grew 19 percent.
Mobile phones shipments increased 21 percent in 2005, but growth is expected to slow to between 10 percent and 15 percent this year after shipments of 817 million units in 2005, according to Gartner. While that's solid growth for an industry shipping such large volumes, those rates "are not sufficient for the growth that our shareholders expect," East said.
So, with sales of digital gear booming, ARM is looking to convince semiconductor companies to reuse the expertise they've developed with ARM cores in new chips for digital devices. New ARM cores, such as the Cortex family, contain technology designed...
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