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ARM CEO Warren East.  (Source: ARM)
ARM's Race: Deal with Microsoft to power next-gen PCs will continue to propel chip designer.

After beating year-end profit forecasts, thanks in part to iPhone and iPad sales, shares of ARM Holdings hit a 10-year high yesterday, The Telegraph reports.

ARM, chip designer for most of the world's mobile devices, has been at the center of take-over speculation. This speculation helped the company's shares close at 547 1/2p, the highest since the dotcom bubble 10 years ago, according to The Telegraph.

"It's hard to see what could have been better in this set of results. We've had a record in terms of earnings, and a record backlog up 75 percent [compared with last year]," ARM CEO Warren East told The Telegraph. "We are exposed to areas of strong structural growth. Just about everything is being connected to the internet, all of these are opportunities for ARM technology." 

ARM reported a 73-percent increase in pre-tax profits to £167.4 million in 2010. Year-end revenue was up 33 percent, to £406.6 million.

The company is poised for continued success. At CES last month, ARM announced a partnership with Microsoft to power the next generation of Windows PCs -- traditionally Intel territory. Many took the partnership as a sign that Microsoft felt Intel couldn't compete against ARM's power-savvy architecture. Intel countered, claiming that because it would take Microsoft so long to ready its next OS, Intel would have designs ready by then that could take on ARM.  

"Windows will always run best on Intel," an Intel spokesman was quoted saying. "Porting Windows to a new architecture, where chips are generally incompatible with each other and require sizable investment in millions of other software code, applications and middleware will be complex and costly."

As East admitted, ARM would not begin to profit from the Microsoft deal for at least four years, because the new products have to be designed and built. "Clearly the Microsoft announcement is a massive deal," East told The Telegraph. "It's all a question of when [ARM will begin to power desktop computers]. I don't expect a massive share in PCs in the short term but I certainly do from tablets."

While some analysts predict that ARM could one day power half of the world's PCs, the company's true threat to Intel -- especially in the present tense -- remains modest.

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RE: imagine
By nafhan on 2/2/2011 1:12:40 PM , Rating: 5
Uhm... Fusion?

Power usage charts from Fusion show load power for the whole system at less than 35 watts:

RE: imagine
By Da W on 2/2/2011 1:40:00 PM , Rating: 2

ARMS trades at 92 times profits.
Nvidia at 73 times
AMD at 13 times
Microsoft at 11,5
and Intel is at 10,5...

If Microsoft running on arm is such a big deal for ARM and Nvidia, why everybody is forecasting microsoft doom???

Intel is at least 1 or 2 generation ahead of eveybody else in term of process node. Followed closest by AMD (global foundry) which is a year late. I don't really care about efficient ARM architecture if Intel/AMD can reduce their x86 footprint enough to be irrelevant.

RE: imagine
By Taft12 on 2/2/2011 2:16:09 PM , Rating: 1
Why are you guys talking about Windows and x86? ARMs future is now in devices that have no business running Windows (tablets and smartphones)

The market for low-end x86 CPUs for HTPCs or home servers is already very well served by both AMD and Intel.

RE: imagine
By Da W on 2/2/2011 3:37:32 PM , Rating: 2
Cause you can put x86 in a teblet or phone and put windows on a tablet and soon put ARM on a windows PC. It's all interlinked.
But ARM hype is overdone.

RE: imagine
By niva on 2/2/2011 5:31:14 PM , Rating: 2
ARMs future has always been in devices that aren't running Windows. Looks like now some of it's profits might be because Windows will run on it in the future though.

This is a very big deal.

Farthermore the architectural differences are a big deal too. You can bet Intel is looking at this very closely.

RE: imagine
By omnicronx on 2/2/2011 11:09:58 PM , Rating: 2
My year old Zotac MAGHD only hits 35 watts while at load, it idles lower.

Thats just an Atom 330 1.6GHZ with a 9400m gpu. So as you've already shown, pc's like this already exist today with ARM.

35w for Windows on ARM would not be that impressive, i'd be thinking sub 10 watts for it to be of interest. (to start)

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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