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ARM projects smartphone shipment recovery within Q32014

23 Jul 2014  | Rick Merritt

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Mobile device shipments will recover from a slump, with numbers that are expected to improve in the second half of the year and generally remain in low double digits through 2018, according to ARM's CEO reporting on the company's latest quarterly results. He also commented on challenges ahead with Moore's Law and fragmentation in the Internet of Things.

ARM's royalties, heavily impacted by smartphone shipments, grew just 2 per cent in its latest quarter. CEO Simon Segars said the slump was cyclical, due in part to a buildup of inventory that will dissipate in the next two quarters.

Intel reports sinking mobile revenue
Stacy J. Smith, Intel's CFO and EVP, attributed the decrease to losses in the 2G, 3G and multi-communications sectors as the industry transfers to LTE.

"We believe our licensees have had a stronger Q2 and will be stronger in Q3 with momentum building, so we think we are at or near the bottom of this cycle," he said in meeting with analyst broadcast on ARM's website.

Specifically, carriers and OEMs are "bleeding off 3G devices in anticipation of 4G coming on," said Antonio Viana, president of ARM's commercial and global development groups, in an interview with EE Times.

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ARM's royalties, driven by smartphone shipments, tend to follow 18- to 24-month cycles, the company said.

"Q2 shipments indicate we're coming out of this and will be in a recovery in the second half... This is not even one of our deeper toughs," Viana added.

ARM signed 41 new licences in its quarter, boosting overall revenues to US$309.6 million, up 17 per cent from the period last year. Two of the licences were for unannounced 64bit products code-named Maya and Artemis.

Overall ARM projects an 11 per cent compound annual growth for smartphones, leading to sales of 1.9 billion handsets in 2018 up from 1.1 billion last year. It anticipates the entry level segment will become the largest with as many as a billion devices by 2018.

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Sales of 41 new licences made up for a slump in royalties in ARM's second quarter.


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