Licensing demand for ARM’s chips offsets smartphone slowdown

Chipmakers licensing more powerful mobile technology helped ARM Holdings to beat expectations for the third quarter yesterday .

The company, whose chip designs power nearly all smartphones and most tablets, reported a 36 per cent rise in pretax profit to £92.6 million (€109m) on revenue 27 per cent higher at £184 million.

However the strong performance in licensing overshadowed weak smartphone demand over the summer, which resulted in ARM’s royalty revenue missing expectations.

ARM licenses its chip designs to chipmaking partners and it receives a small royalty on every chip its partners ship that includes its technology.

These royalties increased 16 per cent to £78.7 million in the quarter, missing consensus expectations of some £83.5 million. – (Reuters)