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2012 has been another great year for ARM, with the company achieving record revenues and profits. In 2012, ARM’s royalty revenues continued to benefit from the proliferation of mobile computing devices, like smartphones and tablets, and from everyday devices becoming increasingly smart and connected. This trend for smarter and more power efficient devices is set to continue and is helping to drive the demand for ARM’s low power, high performance processor technology. Furthermore, as the world’s devices and machines become increasingly connected, the amount of information that is generated, shared and stored is also increasing. In order to cope with the expected growth in data demand, networking infrastructure and server companies are looking at using ARM technology to provide scalable, low power and low cost solutions. 2013 brings exciting opportunities and challenges as ARM enters competitive new markets where we are well positioned to succeed with leading technology, an innovative business model and a thriving ecosystem of partners.

The ARM annual report provides details of ARM's key markets and how certain technology trends are creating significant opportunities for the company. It also discusses ARM's strategy for growth and how we performed against that strategy in 2012. The report contains multiple case studies that illustrate ARM, our markets, partners and ecosystem in action, including a piece by Jim Moore, a leading academic and author, who...

This post is the last in a series of five where we have discussed a number of key markets for ARM over the next five years. ARM’s opportunity to grow royalty revenue is driven by multiple markets that are growing structurally and where we may also gain share. In this blog we interview Gary Atkinson, Director of Embedded Segment Marketing, to discuss ARM’s growth opportunity in Microcontrollers.

Hi Gary, what exactly are microcontrollers and why is this market so important to ARM?
Hi Jonathan, microcontrollers or MCUs, are low cost general purpose chips that are used to provide some embedded control capability into the products that we use every day. These products range from white goods such as washing machines to industrial control systems within factories, elevators, vending machines.



The microcontroller market is huge with nearly 6 billion chips being shipped in 2010. It is a highly fragmented market with many semiconductor companies having multiple microcontroller product lines. On the demand side there are many Original Equipment Manufacturers (OEMs) who are buying anything from a few hundred to many million microcontrollers per year, often from multiple suppliers. Market analysts expect the MCU market to grow at about 9% per annum for the next five years, and in 2010 we estimate that ARM had about a 10% market share of the tot...

Over the next five years, ARM’s opportunity to grow royalty revenue is driven by multiple markets that are growing structurally and where we may also gain share. This post is one of five where we look at each of these markets.

In this blog we interview Kris Hong, Director of Home Segment Marketing at ARM to discuss the impact of Digital TVs and STB growth.

Hi Kris, how is ARM’s technology used in DTVs and STBs today, how big is the market, and what is ARM’s market share?
Hi Jonathan, ARM’s technology is used in many different ways within the Digital TV and STB market. ARM’s chips could be controlling the user interface or acting as a modem connecting the TV to the satellite dish or cable provider, as well as providing data connectivity to other devices, such as WiFi and Bluetooth chips. According to market analysts, in 2010 there were about 350m DTV and STB devices shipped. There can be multiple ARM-based chips per device and ARM estimates that the total available market (TAM) for ARM-based chips in 2010 was about 450m. In 2010 ARM’s partners shipped approximately 160m chips for STB and DTV applications, giving ARM a market share of about 35%. Most of the ARM processor-based chips were manufactured by companies including Mediatek, Samsung...

Over the next five years, ARM’s opportunity to grow royalty revenue is driven by multiple markets that are growing structurally and where we may also gain share. This post is one of five where we look at each of these markets.

In this blog we interview Roy Chen, Director of Client Computing at ARM to discuss the impact of mobile computing growth for ARM.

Hi Roy, mobile computing can mean many things, how do you define it at ARM, how big is the market, and what is ARM’s current market share?
Hi Jonathan, at ARM, we define the mobile computing market as that category of products which lie between the smartphone and the desktop computer. Today, examples of such products are tablets, netbooks, laptops, notebooks and eReaders. Other form factors are likely to emerge as we look forward.



In 2010, there were just over 200m mobile computing products sold and independent analysts expect this market to reach around 750m devices by 2015, a CAGR of 27%. ARM already has a high penetration in the ancillary chips found in mobile computers, such...

Every investor roadshow has common themes and questions. Here are three frequently-asked questions on our recent visit to investors in Madrid and Milan.


Q. Chip prices decline every year. What impact does this have on ARM’s royalty revenue?

Generally, a chip will be launched at a particular price point but that chip price point may decline at 10-20% per year. ARM’s royalties are typically based on a percentage of the chip price, in which case our royalty revenue from that chip will also decline at the same rate.

However, after a year or two, the semiconductor company will often introduce a new version of that chip with a few extra features and functions. This will have a higher average selling price (ASP) and ARM will benefit from the increase in our royalty revenues. This chip’s ASP will also decline over the years, and the semiconductor company will continue to introduce new versions, eventually discontinuing the older versions.

Analysis of all of the chips within ARM’s total addressable market shows that the average selling price has been fairly constant over the past five years, varying by less than 10% from the mean.

Q. How much pricing power does ARM have?
ARM designs technology that once might have been developed by our ...