UPDATED 15:09 EDT / MARCH 15 2011

High-End Chips Will Be ARM’s Oasis, Stands Strong Despite Tablet Market Glut

When it seems like tablets classification is down to just two: iPad and non-iPads, how will ARM survive? Well, the Cambridge-based enterprise will definitely carry on notwithstanding poor performance of tablets in the market. After all, ARM has high-end chip designs that can generate profit out of long-tail royalties. The company also hopes to increase its presence within the digital television niche.

While it is true that ARM makes money out revenue from chipmakers than manufacture and sell the energy efficient chips currently used in most tablets (a model which is, by the way, in a bit of trouble at present), the company’s stock market shares moved up by 2%. Experts believe that ARM is indeed far from collapsing. In fact, RBS analyst Didier Scemama suggests buying shares of the company saying, “Given that ARM commands c. 95% of the tablet CPU market and c. 90% of the e-reader CPU market, we believe it does not really matter whether consumers buy Apple, RIM or Android tablets … It is true however that if tablet OEMs cut orders because they have to re-assess their plans in the near term, it could create a ’hic-up’ in the supply chain that could affect some ARM partners. Most likely this would be short-lived, in our view.”

Some 48 years ago, Intel co-founder Gordon Moore had a vision that the power of a chip doubles roughly every two years. While some may already terminate this idea, ARM’s chief executive thinks otherwise. He said, “Moore’s Law is alive and well. There are a good three or four generations [of chip design] to go. We have already announced collaborating with IBM to get down to 14 nanometer, and there is a road map of products going down to 8 nanometer.”

Since its inception in the 90’s, ARM has gone a long way, hurdling tough competition before reaching its “hot item” status today. Recent milestones from ARM include a signed licensing agreement with none other than Microsoft.  This move has posed a serious threat to Intel, which answered back by launching a solid state hard drive transfer that reaches the speed of 500 MBps 510 Series SSD.

Without a doubt, the Intel versus ARM story will progress as mobile dominance continues. Qualcomm may come in as a good runner up, but has to be more aggressive in tackling their solutions.


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