Chipmaker ARM Sees Strong Sales Jump Thanks to Growth in Connected Devices

April 23, 2013
By: Tracey E. Schelmetic

The “Internet of Things”, or the idea that ultimately, far more than simply phones, computers and tablets will be Web-enabled, is a compelling technological future. Already in progress, it’s essentially the network that will connect things like cars, appliances and homes to the Internet, allowing consumers to control their home services from smartphone apps, monitor their energy usage remotely through connected smart meters or allow their doctors to keep track of their vital signs with wearable computing appliances such as heart monitors.

While it will no doubt be a technological breakthrough for consumers and service providers, it also represents great opportunities for device and component makers. The embedded- processing business industry, which makes the components for smart meters and appliances, grew 25 percent last year alone.

The burgeoning of the industry has led to strong growth for the UK’s ARM Holdings Plc (ARM), whose chip designs are inside Apple’s (News - Alert) iPhone and iPad, and saw its revenue rise 29 percent to 170.3 million pounds ($260 million) in the first quarter of 2013. This is the biggest jump in more than four years and has been attributed to the Cambridge, England-based company’s report that sales beat estimates as demand increased for its graphics and processing technology, according to Bloomberg.

“We’ve made an encouraging start to 2013 with more leading companies deploying our technology in their products,” said ARM (News - Alert) Chief Financial Officer Tim Score on an earnings conference call. Score noted that the company’s revenue increase this year will be “quite well ahead of” the industry’s projected growth in the “mid-single digits.”

In March of this year, ARM announced that its CEO, Warren East, will be retiring from the company on July 1, 2013. East has been leading the company for 12 years, though his tenure with ARM goes back to 1994, when he was hired to lead the company’s consulting business. ARM’s president, Simon Segars, will step into the position of CEO to replace East. Segars joined the company in 1991 and became a member of the board in 2005. Analysts say Segars is likely to focus on increasing the company’s share of semiconductor designs and moving ARM’s technology into connected devices, Web-enabled “smart” televisions, tablets and smartphones, said Bloomberg (News - Alert).


Edited by Rory J. Thompson