January 11, 1999, Issue: 1043
Section: International
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Claims 70 percent of this year's digital-handset market -- ARM's sitting at the core of mobile-phone boom
Peter Clarke
Cambridge, England - Microprocessor cores from ARM Ltd. will power roughly 70 percent of all digital mobile-phone handsets sold this year, claims Pete Magowan, the company's European vice president. That would give ARM cores-supplied to customers by the company's lineup of chip-manufacturing partners-a presence in mobile phones that would rival the Pentium's dominance of the personal-computer space.
Magowan bases his prediction on his knowledge of existing handset models in which ARM cores already reside and of pending models into which ARM cores have been designed. He said usage of the cores spans the various digital-cellular technologies, including GSM, PDC and, in the United States, CDMA and TDMA.
But how can Magowan be sure of his numbers? He would say only that "three companies dominate handset manufacture." Those three-Ericsson, Nokia and Motorola-are reckoned to hold 70 percent or more of the market. While making that observation, Magowan declined to say whether ARM has obtained a 100-percent mandate with any of those top three manufacturers.
Nonetheless, at least one voice outside of ARM is acknowledging the company's commanding market lead in digital-handset cores. Joe D'Elia, senior industry analyst at Dataquest Europe, said he believes ARM, "surprisingly enough," has indeed reached a position of dominance. "They have got a very high level of design wins with handset manufacturers. In the last 12 to 18 months, the ARM processor has become the core that people have to design with.
"These products are only starting to come through now. The big uptake will come [this year]."
As for ARM's hold on the market, D'Elia said, "I am not sure whether it's 70 percent or 80 percent, but it's a big proportion."
Dataquest pegs the 1999 digital-handset market at 171.5 million units worldwide, although D'Elia acknowledged that the number could be on the low side, given the market's runaway growth.
ARM has repeatedly said that its strongest area for design wins is in the mobile-handset market, which uses the ARM7TDMI Thumb core. Mobile-phone makers hold power efficiency-to preserve battery life-at a premium, and since its creation in 1990, ARM has claimed Mips/W leadership for its processors.
In addition, the Thumb core provides internal 32-bit operation but acts on instructions stored externally as 16-bit words, contributing to power savings.
Magowan declined to say what percentage of the handset market he thinks ARM held in 1998, except to say that it was lower than 70 percent. "We will grow to 70 percent next year," he said.
D'Elia, who has prepared a Dataquest report called "ARM Embraced as a De Facto Standard," said it is likely that ARM is now mandated as the only controlling microprocessor for mobile phones by Ericsson and Nokia. Noting that the company has already logged a number of design wins, he asked rhetorically, "Once you've changed to a particular architecture, why would you bother with several development environments?"
Nonetheless, D'Elia made the point that the DSP architecture selected to run baseband functions is, in some aspects, the more significant design-in. "The ARM occupies just a few square millimeters of the die. It's just that in DSP cores, there is more variety.
"You've got to ask why IBM has taken an ARM core and said it will clone Texas Instruments' C54 DSP," D'Elia noted. "They want to sell embedded PowerPCs [into the mobile market], but basically they can't talk to the customers without ARM and C54 or a similar DSP. Once they're designed in, they can try persuading the customer to look at alternative solutions."
Even so, D'Elia stressed that ARM is no longer just about mobile telephony. "There's a whole bunch of other applications where they are going with low power. There are consumer electronics and automotive and Auto-PC. The design-in time scales on automotive applications are such that you won't see these products until 2000 or 2001, but companies like TI have been doing a lot of work with ARM in this area."
D'Elia said that although ARM derives relatively little revenue from each chip delivered compared with the revenued garnered by the semiconductor manufacturer, the core vendor's rapidly mounting volumes via its multiple semiconductor partners will likely let ARM transcend the perceived limitations of the core-licensing business model.
Copyright ® 1999 CMP Media Inc.
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