Join        Login             Stock Quote

ARM May Suffer If Android Tablet Takeoff Fails: View

 December 14, 2011 02:35 PM

ARM Holdings Plc (NASDAQ: ARMH) business may suffer if Android Tablets fail to takeoff, according to a mixed data that Global Equities Research LLC got from various Silicon Valley event

Apple has licensed physical intellectual property (IP) from ARM and not an architectural license. On relative basis, physical IP license provides less revenue to ARMH versus architectural license.

Converged view is that Apple will move completely away from ARM instruction set over the next 2 years, and Apple will have its own optimized instruction Set, Global Equities pointed out. This will lead to decreased licensing payments from Apple.

[Related -Microsoft Corporation (MSFT) Earnings Preview: What To Watch In Q2 Results?]

Data also points that end user device pricing is under serious pressure, and device manufactures are pushing ARMH to reduce its licensing fees, the brokerage said.

ARMH business is benefiting from many experimental projects, however, if the companies decide to cancel these projects for economic or market reasons, ARMH business could get hurt, according to the converged view.

 ARM designs microprocessors, physical IP and related technology and software, and sells development tools.

On the positive front, Altera (NASDAQ:ALTR) and/or Xilinx (NASDAQ:XLNX) may signup for ARM architectural license, which has the highest price points and has the maximum revenue potential, Global Equities' data showed. The following companies are already signed up for ARMH architectural license – Qualcomm (NASDAQ:QCOM), Broadcom Corp. (NASDAQ:BRCM), Samsung, Marvell Technology (NASDAQ:MRVL), Freescale Semiconductor (NYSE: FSL) and Microsoft (NASDAQ:MSFT).

[Related -Microsoft Corporation (MSFT): Good Buy or Good-Bye?]

Amazon.com is creating a GPU (Graphical Processing Unit) based compute farm, which may also be powered by ARMH chips, Global Equities pointed out.

Overall, negatives may outweigh the positives for ARM based on the mixed data, the brokerage said.  

iOnTheMarket Premium


Comments Closed

rss feed

Latest Stories

article imageInitial Jobless Claims Rose Unexpectedly

Claims unexpectedly rose in the latest report through last weekend to breach 300,000 for the first time read on...

article imageAll Quiet on the Record High Front

What can we glean from the media’s lack of attention to the market’s recent record read on...

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.