ARM Second-Quarter Sales Rise on Doubling of Smartphone Licenses

ARM Holdings Plc (ARM), whose chip designs are used in Apple Inc.’s iPad, said second-quarter revenue climbed 18 percent as the company doubled the number of licenses sold for smartphones and tablet computers in the first half.

Second-quarter sales rose to 117.8 million pounds ($192 million) from 100 million pounds a year earlier, the Cambridge, England-based company said in a statement today. That beat analysts’ estimates for revenue of 109 million pounds, according to a Bloomberg survey.

“In the first half of 2011, we have seen strong license revenues driven by an increase in design activity around ARM technology,” Chief Executive Officer Warren East said in the statement.

ARM, with its low-power designs, is seeking to broaden its range of products, as it takes on Intel Corp., the world’s largest computer chipmaker. The company’s processor designs will be in almost one-quarter of all notebook computers shipped in 2015, according to researchers at IHS Inc.

ARM doubled the number of licenses sold in the first half of the year to 68, compared with a year earlier. The company sold 29 licenses in the second quarter.

ARM shares rose 0.2 percent to 617.5 pence at 9:05 a.m. in London trading.

Microsoft Corp. is enabling the next version of its Windows software to run on ARM-based chips for the first time. The Windows system will be tailored for battery-powered products, such as tablets, netbooks and other handhelds, Redmond, Washington-based Microsoft said.

Competition between smartphone manufacturers won’t affect average royalty prices, Chief Financial Officer Tim Score said today. The level of chip prices remains “pretty flat,” he said. Research In Motion Ltd., maker of BlackBerry smartphones, said yesterday it plans to cut 2,000 jobs, or about a tenth of its workforce, as sales slow.

Second-half revenue in U.S. dollars will be “in line” with estimates, ARM said.

To contact the reporter on this story: Jonathan Browning in London jbrowning9@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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