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17 February, 2011 - 15:55 By Tony Quested

ARM flexes its global muscle


It’s true what they say about Acorns! ARM Holdings is living proof – the mighty oak of a business that grew out of Acorn Computers just over 20 years ago. Business Weekly had been going for six months when the buzz went round the tech community that Acorn in Cambridge was cradling an extremely gifted brain child.

Its technology would change the world, Hermann Hauser and others in the know told us. The name wasn’t slick and snappy and hardly hinted at future greatness – Advanced RISC Machines.

Explaining the capabilities of its core technology took some doing initially but the clamour Acorn was fielding from investors and potential buyers of these magical new microprocessors was unlike anything Cambridge had witnessed. Everyone wanted a slice of this action and Acorn executives took the sensible strategic decision to literally cut its own ARM off!

Advanced RISC Machines was originally structured as a joint venture between Acorn Computers, Apple Computer (now Apple Inc.) and VLSI Technology.

The major driver in ARM’s foundation was Robin Saxby – now Sir Robin and chairman emeritus – who took the early heat by becoming president and CEO in February 2001 and used all the experience he’d gained at ESL, Motorola Semiconductors and Henderson Security Systems Limited to help a small team fulfil its destiny.

Like all the best sustainable, global technology businesses, Advanced RISC Machines had modest roots. Sir Robin often regaled me with tales of the company’s early – sometimes fraught and frenetic – life in a barn with just 12 engineers.

The staff that picked up the ARM gospel from the original 12 disciples also kept alight the flame of inspiration: to such an extent that today the company employs 1700 people, has operations in every major territory on the planet and has long since outpaced Intel in the number of chips that have been shipped around the globe – at the last count more than 20 billion.

Even in the early days, the company stood four-square behind its ambitious mission statement – for ARM to become ‘the architecture for the digital world.

Advanced RISC Machines officially morphed into ARM in 1998 around the time of its double whammy float on both sides of the Atlantic – on the London Stock Exchange and the NASDAQ technology market on Wall Street; since when it has been ‘knocking out the quarters” with metronomic precision.

Faithful to its core mantra, ARM has duly become the global standard embedded microprocessor used in the most digital devices on the planet today.

Its 2009 revenues hit £305 million despite a global economic downturn;  ARM sales typically grow faster than overall semiconductor industry revenues.

Even the word ‘ubiquitous’ fails to do proper justice to ARM’s reach.

ARM never discusses end-user names in relation to its architecture but the whole technology world knows it is powering Apple’s iPhone, new e-Readers, smart phones, mobile phones, digital cameras, set top boxes, electronic games, Apple IPODs, global positioning systems and countless more consumer favourites.

With the company continuing to allocate around 25 per cent of revenue on R & D, it is hardly surprising that ARM stays at the cutting edge. Today ARM technology is used in more than 95 per cent of the world’s mobile handsets and over one-quarter of all electronic devices.

That’s some tribute – not just to the early pioneers – but also to the stewardship of Warren East, who succeeded Sir Robin as CEO in October 2001, and has maintained the best ARM traditions of flair and focus.

Kevin Smith, who joined ARM in January 2001 and was appointed as VP, Segment Marketing last year, is a strong believer in the ARM business model.

This involves the design and licensing of IP rather than the manufacture and selling of actual semiconductor chips. ARM licenses IP to a network of partners, which includes the world's leading semiconductor and systems companies.

These partners utilise ARM IP designs to create and manufacture system-on-chip designs, paying ARM a licence fee for the original IP and a royalty on every chip or wafer produced. In addition to processor IP, ARM provides a range of tools, physical and systems IP to enable optimised system-on-chip designs.

With the diversity of ARM IP and the broad ecosystem of supporting silicon and software for ARM-based solutions, the world's leading Original Equipment Manufacturers (OEMs) use ARM technology in a wide variety of applications ranging from mobile handsets and digital set top boxes to car braking systems and network routers.

The ARM® Partnership  spans a wide and diverse set of applications and markets. To ensure that optimal solutions and a vibrant ecosystem are in place to support this diversity, ARM has dedicated vertical marketing teams driving strategies into four broad categories.

This focus enables ARM to fully understand the challenges faced by customers who design and deliver products into the Mobile, Home, Embedded and Enterprise Segments.

A characteristic feature of ARM processors is their low electric power consumption, which makes them particularly suitable for use in portable devices.

Kevin sees no reason why ARM, operating against this backdrop of keentech and cleantech, cannot maintain its current rate of progress given its close relationships with the designers and manufacturers of energy efficient consumer products.

His team endeavours to look forward four-five years to identify the next big opportunity. And they engage with OEMs and other partners to examine the respective road maps and pinpoint how and why these customers’ projects would best be designed around ARM.

Mobile computing and tablets are among the more obvious segments for ARM to attack and Kevin also forseees growth for the company in convergence via digital TV, set top boxes and residential gateways.

He says: “There’s a lot of discussion about what technology you need in the home. ARM is developing a lot of momentum in the world of digital TV because solutions can address the requirements of providing internet connectivity and social networking direct to the home.“We are in a strong position in the mobile computing and smartphone areas. We cover many different parts of the value chain through our closeness with our silicon partners.

“We stay close to our silicon partners, the OEMs, the telecoms operators and cable operators who understand the dynamics of their industries. From our standpoint it is a question of ensuring we have the right technology in place for when they are ready to move on new products.

“While we retain close dialogue with them, we are well placed to anticipate and respond to their future moves. Our partnership model remains absolutely core to everything we plan and do. It is part of our DNA.

“The original mantra to be ‘The Architecture of the Digital World’ was a big vision but the strength, depth and closeness of our relationship with our key partners gives us pretty good visibility on potential new products some four-five years out.”

Crystal-gazing is all part of the process for Kevin and ARM’s other segment-focused teams and they have identified a major opportunity for the company in the sphere of automotive.

ARM’s architecture can be utilised for most major automotive requirements – from controlling car braking systems to air bags, steering advanced in-car entertainment and infotainment.

The really exciting aspect of all of this for ARM looking forward is that its architecture is so versatile it can be targeted at multiple segments.

So it will be ahead in the cloud computing universe.

As businesses accumulate more data they will need to improve the storage of this information and will have more HDD requirements. ARM is already in 65 per cent of Hard Disc Drives, says Kevin. This kind of knock-on benefit will spin into the realm of tablets, mobile computers, digital TVS and many more new-tech segments.

And Kevin sees ARM being a major player in a boom in microcontrollers wherever they are required; sensors, smart metering, monitoring and movement of white goods; with an available market forecast to be 2 billion microcontrollers in automotive in 2014 alone – so you can see why ARM is rubbing its hands.

It appears that pretty much everything about ARM’s architecture is scaleable – and that is a key value driver for buyers of the IP.

The more consumers demand more personalised services on their mobile phones, with heightened connectivity wherever they may be, the more ARM will be in demand – from Europe to the Americas; from China to India.

ARM is at the heart of the global technology revolution. What’s more it has the roadmap to drive straight there.

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