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IBM Licenses ARM Chips to Boost Ailing Hardware Business

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Oct. 24 (Bloomberg) -- International Business Machines Corp., the world’s largest computer-services provider, agreed to license processor designs from ARM Holdings as losses mount at its hardware division.

ARM’s chip technology is used in mobile phones and is increasingly being deployed in more demanding devices such as servers and networking equipment.

“Our clients will now have the broadest array of leading silicon technology and design services available -– giving them the ability to create the next generation of communications hardware,” Steve Ray, vice president of IBM’s microelectronics division, said in a statement today.

IBM said last week that the hardware business continued to drag the company down, with revenue in the unit declining 17 percent in the third quarter. The company lost $713 million in its hardware business in the first nine months of this year, compared with $253 million in profit in the year-earlier period.

Chief Executive Officer Ginni Rometty shook up the management of the division in April, replacing Rod Adkins with Tom Rosamilia, who had been overseeing corporate strategy.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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