Arm Case Study: Exploiting Ip In A Growing End-market

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ARM Ltd is a designer of low-power microprocessors, which generates revenue by licensing its intellectual property to semiconductor manufacturers. It has enjoyed ten years of unbroken profitability, more than quadrupling its revenues during the same period. This case study shows how providing a solution to a technological problem, and consistently executing a simple but effective business mode. http://www.bharatbook.com/market-research-reports/consumer-electronics-market-research-report/arm-case-study-exploiting-ip-in-a-growing-end-market.html

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Highlights
ARM designs the core architecture of the processors that form the heart ...
... of many contemporary electronic products. It then licenses the designs to semiconductor manufacturers, and does not manufacture any chips itself.
ARM is dominant in the mobile computing processor market. Its Reduced Instruction Set Computing (RISC) processor designs offer much lower power consumption than alternative architectures.

Your key questions answered
* What is ARM's business model? Who are its competitors?
* What are its end-markets? How well has the company performed?

OVERVIEW
Catalyst
Summary

ANALYSIS
Processor chips are central to many electronic products
Processors manipulate digital data and coordinate devices by executing programs
Processors may have CISC or RISC architectures
RISC processors such as the ARM designs can operate at lower power than CISC
Low-power processors are ideal for small, battery-operated products
ARM generates revenue from its intellectual property, not from manufacturing
Chip design is separable from chip fabrication
Fabrication plants are major items of capital expenditure
Third-party manufacturers pay license fees and royalties to ARM for use of its designs
Personal computing and communication is changing
Personal computers used to be for complex applications and Internet access
Mobile phones used to be for voice and SMS, with little or no computing power
Old boundaries are now blurred by convergence
New mobile computing devices need high computational power with low battery power
Mobile computing devices run complex software
More processing capacity usually means more electrical power consumption
ARM designs are effective solutions to this technological problem
ARM has high penetration of mobile computing market, and strong dependence on it
ARM's chip designs are found in many mobile phones and portable computing devices
More than half of all chips made from ARM designs each year are found in these devices
Intel may pose a threat with its Atom processor
ARM remains focused on R&D
ARM is willing to spend substantially on R&D
Optimizing the 'PPA' balance is central to the company's design philosophy
ARM is present in several dynamic end-markets
Mobile computing devices remain a key end-market, which is still expanding
The company has a leading position in designs for hard disk controllers
It is growing its presence in digital TV and microcontroller markets
Processors have synergies with other hardware and software
A processor with a strong market position will tend to maintain it
CONCLUSION
Focus on core competencies has led to profitability
APPENDIX
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ARM Case Study: Exploiting IP in a growing end-market

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