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It pays to be king of mobility

Whether you're an Apple, Inc. (AAPL) fan, a Samsung Electronics Comp., Ltd. (KSC:005930) fan, or you hate them both, chances are you have a device powered by a processor using either ARM Holdings Plc.'s (LON:ARM) proprietary instruction set or intellectual property cores.

In the last two decades the UK-based ARM has established itself as the kingpin of mobile and embedded applications.  And with smartphones and tablets today chipping away at traditional computer sales, ARM is soaring high.

While the architecture mastermind only get a small licensing fee per chip made by companies like Samsung, Apple, Qualcomm, Inc. (QCOM), or NVIDIA Corp. (NVDA), those pennies add up to big revenue.  Best of all, since the revenue is virtually all in the form of licensing fees, ARM enjoys massive margins.

Analysts were hoping for an impressive £75.6M ($119.2M USD) on a revenue of £152.2M ($239.9M USD).  ARM made those estimates look conservative, announcing [PDF] that in Q4 2012 it made a pre-tax profit of £80M ($126.1M USD) on a revenue of £164.2M ($258.8M USD).  That's up 16 percent from a year ago, and sets a new record for the veteran chip-designer.

ARM chip on penny
ARM's low-power system-on a chips dominate the mobile and embedded markets.
[Image Source: Digital Trends]

In accompanying statements ARM said that it does not predict a slowing semiconductor market will hurt its growth.  It says that effect will be offset by the company's dominance in fast-growing niches, such as the tablet computing market.

Sources: ARM, Reuters





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