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back to article ARM scooping in cash but remains cautious

ARM has outperformed estimates for the second quarter, increasing revenue by 18 per cent as its chips continue to be embedded in everything from mobile phones to washing machines. More than a billion chips, based on licensed ARM designs, shipped during the second quarter of 2011. That pushed the company's pre-tax profits up to £ …

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Peanuts

I find it a constant source of bemusement that inspite of their chips ubiquity Arm barely makes any money from them whilst the arm vendors make billions.

Obviously the light licensing costs have helped Arm get to where it is now, but isn't there an argument to say they are under valuing the potential license fees to be earnt?

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Happy

@gordon 10 - Peanuts

That may be so, but at the same time if they bumped the license fees then Apple et al would just go somewhere else.

I think it's an excellent example of a company making a fair profit out of licensing their IP without being too greedy.

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My thoughts entirely

But then wondered if bumping their license fees would be counterproductive - i.e they sell less stuff. ARM seem to be playing a long game here - ensure their market stays with them - rather than go for all out profit and succumb to Intel.

Still, 54mil profit out of 117m rev is a pretty good percentage. Must keep them in beer and skittles.

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Responsible business practice?

Maybe that's the name? Dominate the sector, and make decent but not exuberant money, without screwing the hell out of every customer and rival alike?

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re: Peanuts

Remember that a large part of the cost of chips goes into the foundry, which ARM doesn't have. That means less profit, but also less capital tied up.

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I wonder...

...if Acorn Computers ever regretted spinning ARM off into a completely separate company? :)

If only Acorn had bothered marketing themselves more, they might have lasted longer - after all, they had a 32-bit WIMP GUI back in 1988 - that' s 7 years before a certain Redmond based company caught up...

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Meh

@mittfh

"...if Acorn Computers ever regretted spinning ARM off into a completely separate company? :)"

Perhaps.

They certainly *never* undervalued their hardware.

The only company that matched their pricing was Apple.

Acorn is history. ARM is still in business.

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Acorn.

Acorn did the right thing spinning of ARM. Acorn computers never really made any money. Okay a bit when a new machine came out, but the with the lows they hardly averaged anything.

Yes they had a lot of good GUI stuff, but they never patented anything. No use being first unless you exploit the fact and take over the market or you protect your intellectual property and make some money with royalties.

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More peanuts

The manufactured chips do not sell for much either so manufacturers like TI and Qualcom need huge volume for profits and chip factories are fiendishly expensive and becoming more so.

For a proper comparison you need to compare profits per employee rather than product volume. There you will find, I think, that Intel is quite a way ahead but Intel is one of the anomalies in what is increasingly consumer (low-margin electronics). While ARMs prices are low this is possibly one of the reasons why the market is turning towards them.

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Value of the company

The problem with this plan of not being a monstrous behemoth is that a company with a couple of billion dollars spare cash could just buy them and shut them down (absorb their engineering).

Not that I have anyone in mind.

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@Ramiro

Ah yes, but who would be allowed to buy them? The competition authorities wouldn't let any of the established manufacturers (Intel, TI, etc) buy them. If they were bought by, say, Intel it would give them a very powerful monopoly on a plate, not something that any of use should relish.

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Coat

The A4 and the Snapdragon do not share cores

The A4 is based on the Arm Cortex core, as are many other ARM processors (e.g. Samsungs Hummingbird, TI's later OMAP processors) but Qualcomm are an instruction set licensee - they have designed their own core (Scorpion) which is ARMv7 compatible, but is a completely custom design and not based on any ARM core.

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Anonymous Coward

Errr, no, A4 does not share a core design with the Snapdragon...

The snapdragon is Qualcomm's own ISA implementation of an ARMv7 core; it's not related to the Cortex A8 in the A4 or the Cortex A9's in the A5, both of which are the ARM implementations of the ARMv7 ISA.

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Unhappy

ARM is impressive, but why is it the *only* example that is that successful?

Who are the *other* UK fabless semiconductor companies?

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Imagination technologies?

see title

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@borkbork

Good lord, there really *is* another one.

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Another UK fabless semiconductor companie!

The UK division of Broadcom is I think fabless and its Firepath processor is doing rather well in its market.

It also happens to effectively be another spin off from Acorn Computers!

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@Chris Evans

I think I saw one of their people speak about their work here.

http://www.youtube.com/watch?v=AXD7RlqVzdI

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