ARM Eyes PC, Server Expansion As Intel's Mobile Threat Looms

On the cusp of Intel’s mobile processor debut, rival chip licensor ARM remains confident in its ability to dominate the smartphone space and even plans to grow its presence within the PC and server market over the next three years, said ARM CEO Warren East on Tuesday.

In an interview with Bloomberg, East spoke to Intel’s longevity and success in the PC space, but said ARM does not feel threatened by the introduction of Intel’s new Atom “Medfield” mobile chips – even if it is within a market ARM has dominated for years. Despite Intel’s multi-year, multi-device agreement with Motorola Mobility and a new partnership with Lenovo, East said that ARM has been ready for its rival’s entrance to the mobile space for years.

He also said that ARM’s chips simply go into more products than Intel’s, which will ultimately ensure its success.

"Obviously this has been in discussion for the last four or five years and undoubtedly Intel has a very strong position in PCs, but actually you see ARM technology deployed in a huge number of products," East said in the interview. "Instead of a few hundred million PCs, last year we saw 8 billion ARM chips shipped in everything from tablet computers to tiny little sensors."

East said that ARM’s large product portfolio will only expand over the next few years. Just as its rival Intel is doing, ARM plans to enter new markets traditionally dominated by other chip players. Perhaps unsurprisingly, East said the company hopes to expand its reach into the PC and server markets – two segments in which Intel, especially, has staked a claim.

On the PC side, East said that ARM is aiming to have its chip architectures in approximately 40 percent of the world’s mobile computers no later than 2015. Progress of this transition, he said, was obvious at CES 2012. "You can see Intel getting into those sorts of products [mobile devices], but by similar token, at CES a couple of weeks ago you saw ARM in most of the mobile computers that were there," explained East.

On the server side, East said “significant volumes” of ARM server chips won’t be seen until 2014, but pointed to HP’s announcement that it would leverage ARM architectures to support a low-power server initiative dubbed "Project Moonshot" as proof that the shift is already taking place.

ARM reported a quarterly revenue growth of $217 million Tuesday, marking a 21 percent year-over-year jump from the $179.6 million it reported for the final quarter of 2010. The company’s growth was driven primarily by surging sales of ARM-powered consumer devices, such as the iPhone. Even as the company preps to enter new markets, as long as mobile devices like Apple’s continue to drive consumer demand, ARM will remain strong, East said.

"I think in these uncertain times ARM is very well positioned because our technology goes into products which are growing," the CEO told Bloomberg. "The threat is simply the rate at which people invest in those growing products."