backtop


Print 3 comment(s) - last by maugrimtr.. on Jul 25 at 11:25 AM

Generally Q2 2013 was still a good show for ARM, though who was buffered from smartphone slump on the high end

ARM Holdings plc (LON:ARM) continues to perform bullishly, pumping its pre-tax profit for the second calendar quarter (ending in June) to £86.6M ($132.4M USD), up 30 percent from Q2 2012.

As the producer of the most-used architecture and instruction set for tablets and smartphones, ARM is a classic story of a company positioning itself in the right place at the right time.  As most of its revenue (£171.2M ($262.8M USD) in Q2 2013) comes from licensing, the company is free of much in the way of supply chain/manufacturing expenses and enjoys gaudy margins (48.6 percent in Q2 2013).

The only real disappointment/miss amidst another strong quarter for ARM was its margin growth.  A survey of 12 analysts by UK-based Financial Times, a Pearson PLC unit (LON:PSON), had predicted a pre-tax profit of £83.4M ($128.1M USD) on a revenue of £165.2M ($253.6M USD) (a margin of 50.5).

The lower-than-hoped margin, coupled with concerns about the general slowdown in smartphone sales caused ARM stock to drop 1 percent in Wed. trading, despite the increase in profit.

ARM engineers
ARM engineers in Austin, Tex. show off partner products. [Image Source: My Statesman]

On a year-to-year basis, ARM-architecture chip shipments increased 20 percent, reaching 2.4 billion, roughly 800 million a month.  The company signed 25 new licensees, including 7 licensees of its Mali graphics cores and 5 Cortex-A CPU core licensees.

ARM's new chief executive officer Simon Segars in an earnings call states that his firm is just getting started, remarking, "[The] smartphone market itself, as I said is developing in quite interesting ways, and it's easy to think that everybody on the planet has a smartphone, but actually when you look at global penetration of smartphones it's actually quite low."

He points out that while sales of high-end smartphones like devices from Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KSC:005930) have stagnated in recent months, overall budget and mid-range models are continuing strong growth.  

Mr. Segars estimates the mid-range market will reach 500 million units by 2017.  ARM is targeting the Cortex-A12 core at the segment.  Its high end offerings are currently anchored by the big.LITTLE paired Cortex-A15/Cortex-A7 companion core model.  The CEO plugged Samsung's new Exynos 5420 chip, the first octacore ARM processor to use this model.

Exynos 5 Octa
The Samsung Exynos 5420, is the first A15/A7 big.LITTLE octacore SoC.

Looking ahead, in addition to mobile growth, ARM is Mr. Segars says his firm will continue to look to establish a beachhead in the traditional personal computer and server markets.  ARM was recently boosted when Advanced Micro Devices, Inc. (AMD), the second largest producer of server CPUs, announced it would be move away from x86 and transition its server lineup to use ARM cores.  However, in the PC market ARM-equipped laptops/hybrids with Microsoft Corp.'s (MSFT) Windows RT have struggled.  Google Inc. (GOOG) Chromebooks containing ARM chips have been strong sellers, though, driving ARM to a small laptop market share.

Mr. Segars says embedded networking controllers is another key area of future growth for ARM, as data traffic skyrockets globally.

Sources: ARM [press releases], Seeking Alpha [earnings call transcript[, FT [analyst estimates]



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Not Transitioning
By ICBM on 7/24/2013 5:07:48 PM , Rating: 3
AMD is adding ARM to its serving lineup, not transitioning which implies dropping x86. That was the impression I got from reading it anyways.




RE: Not Transitioning
By maugrimtr on 7/25/2013 11:25:38 AM , Rating: 2
True. AMD will continue making x86 server procs. The ARM processors are a complement for specific niches, e.g. high throughput web servers that don't need high end chips in many cases.


5410 forgotten already?
By Yofa on 7/24/2013 4:43:25 PM , Rating: 2
the samsung exynos 5410 may have been a dud, but it beat the 5420 to be the first big.little a15/a7 implementation.




"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki