ARM looks to health monitoring as part of growth plan

The UK intellectual-property company sees many markets opening up as it ploughs 30 percent of sales revenue into R&D

ARM continues to see substantial sales growth fuelling more acquisitions, and more expansion into new products and new areas with enough cash left over to fund a share buy-back scheme. But the company behind the iPod's processor also moderated its expectations yesterday, lowering its growth forecast to between 15 and 20 percent for the remainder of the year.

The company says that it expects to see the biggest growth in areas outside the telecoms sector and in the use of technology in more imaginative ways.

"What we see is consumer technology using a combination of enabling technologies for communications, storage and media processing," said Warren East, chief executive of ARM. "I think we will see a lot of other products incorporating different proportions and different form factors for providing those technologies."

"I think this wave is driven by the consumer and more and more products coming into the home," said Sir Robin Saxby, ARM's chairman. "We are in China now and one of the first products is bus stop signs that help you get on a Chinese bus."

"What we try to do is understand the long-term trends, then provide the technology. We have to understand needs in five to ten years time and one of those needs is to stay alive. Health monitoring is a key application and you can imagine your mobile phone keeping you alive," Saxby went on to explain.

The company is cash rich. As East pointed out, ARM generates enough cash to fund acquisitions of other IT companies and make a healthy 20 percent profit while buying back shares so it can increase share holder value.

While it lowered its growth forecast from 20 percent to between 15 and 20 percent, ARM announced a second-quarter profit of £19.6m, up from £18.8m. In August ARM spent $900m (£512m) buying Artisan Component, a chip company, primarily for the IP in its designs, its expertise and its clients