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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Tuesday 26th July 2011 13:49 GMT Gordon 10

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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1. Tuesday 26th July 2011 14:42 GMT Anonymous Hero
  
  @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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2. Tuesday 26th July 2011 14:43 GMT James Hughes 1
  
  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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3. Tuesday 26th July 2011 14:43 GMT Eugene Crosser
  
  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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Tuesday 26th July 2011 14:42 GMT Ami Ganguli

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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Tuesday 26th July 2011 14:42 GMT mittfh

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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1. Tuesday 26th July 2011 22:13 GMT John Smith 19
  
  @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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2. Tuesday 26th July 2011 22:27 GMT KeithSloan
  
  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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Tuesday 26th July 2011 14:55 GMT Charlie Clark

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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Tuesday 26th July 2011 14:59 GMT Ramiro

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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1. Tuesday 26th July 2011 21:08 GMT bazza
  
  @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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Tuesday 26th July 2011 15:24 GMT Dave Fox

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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Tuesday 26th July 2011 15:25 GMT 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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Tuesday 26th July 2011 22:13 GMT John Smith 19

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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1. Wednesday 27th July 2011 08:39 GMT borkbork
  
  Imagination technologies?
  
  see title
  
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  1. Wednesday 27th July 2011 17:35 GMT John Smith 19
    
    @borkbork
    
    Good lord, there really *is* another one.
    
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Wednesday 27th July 2011 16:07 GMT Chris Evans

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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Thursday 28th July 2011 08:42 GMT John Smith 19

@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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