ARM’s sales have slowed down a bit, and the chipset maker isn’t enjoying the profitability they once did.
This is mostly due to the drop in high-end smartphone sales during the first quarter of 2014.
Since more and more people are moving from higher-end smartphones to more affordable options, ARM’s royalties and chip sales are moving at a slower rate. Also, because ARM owns about 95% of the mobile chipset market, it’s difficult for them to expand their business. So they need to rely on royalty share gains as the primary source of their expanding income.
ARM’s total revenue rose 10%, getting them $305.2 million. CFO of ARM, Tim Score was positive about the company’s revenue growth, as would any CFO:
“We’re pretty optimistic…we expect royalty revenue growth to be consistent with where it’s been in the last two or three years.”
ARM’s license revenue increased 37% to $129.9 million. They also made a few pretty pennies off of licensing for wearable devices. As with any royalty agreements, the more products sold that have royalty fees, the more royalty dollars ARM will rake in.