ARM profits buoyed by demand for 64-bit iPhones

Healthy demand for ARM's 64-bit processors helps the British chip designer increase profits by more than 10 percent last year.

Strong sales of the iPhone 6 helped drive profits at British chip designer ARM last year - with the firm expecting to benefit from a flurry of new mobile devices using its 64-bit processor.

The bounce in ARM's fortunes look to continue this year, according to ARM CEO Simon Segars, as chips based on its 64-bit ARMv8-A processor architecture, such as those inside the iPhone 6, ship in greater numbers.

Full year revenues at the firm rose by 11 percent during 2014 to £795m and profit before tax climbed 13 percent to £411m. For the fourth quarter group revenues rose 19 percent year-on-year to £226m and profits before tax went up 25 percent to £118m. These results beat analyst expectations, which had predicted pre-tax profits of about $113m, according to consensus estimates. ARM earns money from licensing its designs to chip manufacturers and royalties, when these ARM-based processors are sold.

Read this

Internet of things and wearables drive growth for ARM

Second generation of internet of things and wearables, plus enterprise networking boosts profits at chip designer.

Read More

More than 95 percent of smartphones contain an ARM-based processor and Noel Hurley, general manager of the CPU group at ARM, said the company's earnings had been buoyed by the mobile market.

"We've seen very strong uptake on our 64-bit processors, mainly for the tablet and mobile market, with two main ecosystems being Android and iOS," Hurley said.

More phones and tablets based on ARM's 64-bit Cortex A53 and Cortex A57 processors will be on show at the upcoming Mobile World Congress event, he said.

Looking further ahead, devices based on the ARMv8-A-based A72, its newest processor, will hit the market in 2016-17, he said, bringing another leap in mobile performance.

Compared to a Cortex A15 chip, commonly found inside mid-range Android smartphones today, Hurley said there would be a three times improvement in performance for the same power consumption.

"Couple that with similar uplifts in graphical performance as well and you get a significantly more capable device with the same battery life that you have today."

This additional power would help bring more complex enterprise productivity tools to the phone, as well as allowing voice and image recognition to be carried out on the device, rather than via an online service, he said.

However, demand for ARM-based processors is also growing in areas other than mobile.

ARM issued a record number of licences for its chips in the fourth quarter of the year, with 53 licences issued for uses that also included enterprise infrastructure, high performance computing and microcontrollers and chips for sensor hubs.

In particular, increasing numbers of low-power ARM Cortex M chips were shipped during the past year as sensors and internet connectivity was built into more everday objects.

"We have a number of interesting growth areas at the moment, we're seeing Internet of Things, we're seeing markets like wearables coming up, the use of electronics in the automotive sector is also on the increase," Hurley said.

"I characterise it as this desire to add increasing amounts of intelligence into everyday devices."

Read more about ARM: