Chip king ARM hurt by phone sales slowdown
(City A.M. (UK) Via Acquire Media NewsEdge) BRITISH chip designer ARM said a slowdown in demand for Apple and Samsung smartphones was behind a smaller than expected rise in fourthquarter royalty revenues.
ARM, whose technology is in nearly every smartphone, reported processor royalties of £80.8m, up seven per cent, but shy of analyst forecasts of £84.5m.
Shares in ARM closed down six per cent yesterday, after the results disappointed investors, at 875p.
The top-end smartphone market has showed signs of reaching saturation, with Apple and Samsung, both ARM customers, last month reporting lower than expected sales of the iPhone 5S and Galaxy S4 phones in the holiday season.
"ARM's partners reported that they had shipped 2.9bn ARM-based chips, a record number despite slower growth of chips for premium smartphones.
This takes our cumulative shipments since 1993 to more than 50bn chips, with over 10bn reported as shipped in 2013 alone," said chief executive Simon Segars.
Royalties make up just over half of ARM's revenues, with licenses accounting for slightly less than half.
Processing licensing revenue rose 26 per cent to £67.7m in the fourth quarter, beating market consensus expectations of £58m.
(c) 2014 City A.M.
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