The CEO of microprocessor technology firm ARM believes the UK company will build on its success so far in the mobile space by capitalising on a market it expects to be ten times larger: the embedded device sector.
In an exclusive interview with Mobile World Live, ARM’s Warren East (pictured) stated: “If you add up all the smartphones and the tablets and the digital televisions and the PCs… and cast your eye forward a few years we see a large opportunity of perhaps 3 billion to 4 billion units per annum, but we see an embedded market that’s maybe 30 billion to 40 billion units per annum, and so that’s where we get the factor ten.”
As part of its first quarter results for 2012, the company said the number of chips based on its architecture shipped for consumer and embedded devices increased by 15 percent during the period to hit 800 million. In comparison, chips for mobile phones and computers remained fairly static compared to the year before at 1.1 billion units.
ARM has been a huge success story for UK industry; the firm’s technology is found in 90 percent of all smartphones and 95 percent of all mass-market phones, but the company has always had a low profile in the mobile space. East remains untroubled by this lack of brand presence: “We have a different business model from a traditional semiconductor company. We license our technology to hundreds of semiconductor companies who incorporate it in their chips and sell their chips and therefore ours is very much an ingredient brand. We don’t need to have consumer awareness, neither does our business model support the sort of marketing expenditures that’s necessary for consumer awareness.”
East also claims to be unfazed by the efforts of PC giant Intel to break into the mobile space: “The semiconductor world has always been a world of full of competition and our business thrives on competition. Our business model is about enabling many different semiconductor companies to create product offerings based around ARM technology and that means that you get tremendous diversity of solutions and that stimulates innovation. Having additional stimulation through a competitor like Intel using an alternative architecture only makes the ARM products even better.”
With Intel targeting its core mobile space, and the huge potential offered by the nascent embedded or ‘connected’ device market, it’s no surprise that East is focused on moving into new technology sectors. "Mobile is a very important sector but it is just one sector and if you look at all the worlds microprocessors shipped last year about 30 percent of them are ARM flavoured. That means 70 percent of them weren’t ARM flavoured and to me that’s opportunity. You combine that with the notion that actually the world around us is going to make much greater use of technology going forward, much greater use of microprocessors. The volumes are going to increase even more, from 20 something billion units last year to perhaps 40 billion units in five years’ time; that’s tremendous opportunity as far as I’m concerned and that’s why I say we’ve barely started.”
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