ARM sees future in chips as it prepares for battle

Other chips could monitor a bicycle’s movement, along with a host of other clever, tiny gadgets that you could wear everyday.

Welcome to the future, according to ARM Holdings, a company which has a significant base in Yorkshire.

Yesterday, chip designer ARM unveiled plans to defend its more than 90 per cent share of the mid-range mobile device market, against the threat posed by its rival, Intel Corp.

Yorkshire-based staff from ARM, whose technology powers the iPad and iPhone, are helping to create microchips for the consumer devices of the future.

The 65-strong team at the company’s Sheffield office are also helping ARM to move into the server market, which places it in direct competition with big industry names like Intel.

ARM hopes its performance will be boosted by a new processor it unveiled yesterday at a major trade show.

ARM introduced the new Cortex A-12 processor, which has been devised for smartphones that sell for between £131 and £229; a market that the company said would accommodate half a billion devices a year by 2015.

ARM also expects to see its chip designs in more wearable devices in the future, such as smart watches, which it said could be available this year.

“Wearable and interneted devices are starting to come into the industry,” ARM marketing executive vice president Ian Drew said yesterday, before the Computex show fair in Taipei.

“I was riding a bike with a motion detector, and we’ve demonstrated a fork that has ARM control in it to count calorie consumption... I suspect sometime this year you’ll see one or two (manufacturers) demonstrate smart watches.”

US rival Intel, the world’s largest chip maker, last month unveiled the most extensive overhaul so far of its Atom mobile processors, that underpin its push into smartphones and tablets.

Its chips now power a number of devices in the mid-market segment that ARM is targeting with its new processor.

“They are a very big competitor and they’re a big competitor to our partners. We have a different business model – we license IP,” Mr Drew said.

“But we’re not slowing down. We focus on how we differentiate the industry... which is why we launched Cortex A-12 and all the graphics and video products around that.”

ARM said the new processor would deliver a 40 per cent improved performance than its predecessor, the Cortex A-9, using a similar amount of energy.

It expects devices using Cortex A-12s to be on the market by mid-2014.

In a note, Janardan Menon, an analyst with Liberum Capital, said: “ARM has launched a new processor core, graphics core and video IP for the mid-range smartphone market...

“On the processor core we do not expect the Cortex A12 to make a meaningful difference to ARM’s outlook, as ARM already has almost 100 per cent market share in smartphones, covering the low, mid and high end of the market.

“However Intel is attacking its share, at both the mid and high-end of the market, and the new core will help defend share at the mid-end.”

The note added: “We maintain our sell recommendation on ARM, given its high valuations and the increasing competitive threat from Intel.”

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