ARM heads: Our cores still have legs ... as shares tumble amid 'peak smartphone' fears

British chip design firm ARM Holdings painted a rosy picture of its future growth on Tuesday, but it missed analysts' revenue expectations for the third quarter of its fiscal 2014, reigniting old fears that slowing smartphone growth will hurt the firm's long-term profitability – even though it's looking just fine in the near …

[Zot]

Share holders In general have...

...a sack of baboons where their brains should be.

[Anonymous Coward]

Re: Share holders In general have...

Your grammar is lacking

Instead of: "...a sack of baboons where their brains should be."

It should be: "... the sack of a baboon where their brains should be". You know which sack...

[werdsmith]

Re: Share holders In general have...

I despair that the world has its prosperity directly coupled to these cockwits and their ill-informed opinions of the markets.

[Gordon 10]

Re: Share holders In general have...

In fairness to the shareholders this one looks directly as a result of ANALyst cockwombles.

[Anonymous Coward]

The More moments

These leeches called Analysists are never satisfied.

They set a target

Company come in 20% higher

Shares go down because some [redacted] says they should have done 30%

This breed of crystal ball gazer are rapidly climbing my pecking orser of who get lined up against a wall and shot come the revolution. At the top are Lawyers who become Politicians. Next comes Derivative traders followed by the CEO's of Banks. Currently Analysists are at No 9 just befind The Zuck (for all those who are Faceblock addicts)

{to the NSA/GCHQ, this is pure fantasy you know but we have to have someone to hate}

[Destroy All Monsters]

Re: The More moments

Comrade Lenin, please.

[Ossi]

Re: The More moments

Much fun as the righteous anger here is, it's all based on a misunderstanding. The value of a business is determined by its profits - not its past profits, but its *future* profits. Therefore, the value of a company is always based on the market's estimate of what future profits will be. When news comes along that changes those expectations (which are largely informed by the company's own estimates of its future profits) the value of the company changes. Where's the evil?

[Anonymous Coward]

Re: The More moments

Mystic Meg always looked pretty evil to me. Something in the makeup I reckon :)

[Anonymous Coward]

Re: The More moments

I think the same thing applies on the way up. If you play the game on the way up, you have to play the game on the way down.

Whilst ARM is a good business, in terms of share price versus earnings, the valuation for the last few months/years is very, very optimisitic.

Only significant dominance of a very high volume market could justify its valuation going forward. (IoT is the buzz word these days)

Do the math - how many processors do they need to sell across their portfolio to come down to a PE of say 10?

I think shareholders are taking profits and that is fine.

Edit:

Just saw ossi;s comment - totally agree!

[Vector]

The Intel Threat

Much as I'm not (yet) a fan of their mobile offerings, Intel's hard push into the mobile space has to be considered as well. I'm not aware of any design wins in smartphones, but there have been a slew of tablets, both Windows and Android with "Intel Inside" this year. The Android devices, at least, would formerly have contained ARM SOC's of various flavors.

[Anonymous Coward]

Re: The Intel Threat

One thing we do know is that Intel has been heavily subsidizing the processors in the most recent design wins. The most recent earnings call demonstrated that. They've got deep pockets so ARM needs to keep that in perspective even if it's only long term.

[Spiracle]

Re: The Intel Threat

They've got deep pockets so ARM needs to keep that in perspective...

ARM concerned by deep pockets?

[goldcd]

Intel threat?

Intel have finally produced some pretty good tablet silicon for Android, just as the market has (seemingly peaked), and from recent reports failed to pull in much money from doing so (I'm assuming current offerings were pretty heavily subsidized).

Next big thing seems to be the 'ultra-low-power/wearables', that ARM already seems to have stitched up.

Aside from their 'regular' chips, the place Intel should be doing is between tables and their existing market. Most impressive 'thing' I've seen this year is the new MS Surface. Smidge bigger than your ipad, bit a genuine, real, *proper* computer.

I could almost forgive Windows 8 after seeing it.

[Voland's right hand]

Re: Intel threat?

Aside from their 'regular' chips, the place Intel should be doing is between tables and their existing market

That is not a particularly big market. It is a crack between the tables, filling it with some silicon will not take long.

[Dr. Mouse]

Re: Intel threat?

It is a crack between the tables

Depends. Between tables and their existing market could be between the desktop machine and tables, which is quite a small space.

It could be between the under-desk tower unit and tables, which would often leave enough room for another computer entirely.

Or it could be between server and table. In our server room, we could fit 6-7 machines just on the floor between the rack and our table, so that would be a good market to target.

[Anonymous Coward]

Re: The Intel Threat

And they all bomb, as x86 Android still isn't upto scratch in terms of app compatibility (for apps that use NDK), and still suck at power management compared to ARM.

This should be seen as a positive, that even Intel still can't come close to ARM's designs.

[Nigel 11]

Re: The Intel Threat

I keep wishing Intel and ARM didn't see each other as competitors. Intel has the best silicon tech. Arm has the best low-wattage architecture. Best of both worlds would be ARM chips fabbed by Intel, but Intel keeps plugging away at low-wattage x86 chips despite the intrinsic electrical inefficiency of that architecture.

Wouldn't premium mobile users happily pay royalties to both ARM and Intel on one chip, for longer battery life or reduced weight? (Just possibly, they already are. Do we know for sure who bakes the top of the range chips for Apple and Samsung? )

[Anonymous Coward]

Peak Processor?

Give it a rest morons. Apparently you are so devoid of brilliance that you have to steal from natural resource extraction to say anything at all. Phones is an open ended niche. The source material is sand and we've yet to approach a limit to growth there. Furthermore, the consumer penetration had yet to reach anything approaching 80% so plenty of slack there and finally these same consumers practice rapid upgrade/replacement cycles. Sheesh!

[Destroy All Monsters]

Re: Peak Processor?

> The source material is sand

Actually the source material is very clean sand. And water. And petrol, lots of petrol.

[Dr. Mouse]

Re: Peak Processor?

You can add to that gold and many other metals.

Although you could always just use the universal label: http://xkcd.com/1123/

[Nigel 11]

Re: Peak Processor?

Actually the source material is very clean sand. And water. And petrol, lots of petrol.

I presume you mean a fair bit of electricity, for producing ultrapure silicon and subsequent baking operations. AFAIK there's no essential use of petroleum. Use of oil-derived organic solvents isn't at all high, and biologically derived feedstocks could be substituted.

[Panicnow]

IoT

ARM will be the main benefactor of this fashion. Multiply volumes by 2 year on year!

[passportholder]

Share price at its lowest for a year...

If you think it is undervalued, now could be a good time to invest

[kmac499]

Owners, Stakeholders, Shareholders, Investors, and Analysts..

Whatever the financial niceties can I propose the following relationships to a business..

Owners :- People who's future lives and those of their chldren are almost solely dependent on the disposable earnings of their companies. The best examples of which I believe are the German Mittelstand businesses.

Stakeholders:- People and other businesses who work for and supply the business, Their futures are linked to the business but they may have other options.

Shareholders :- People who are long term partial owners of a business. They have two ways to recieve money back from a business. Sell their share and or receieve dividends.

Investors :- Gamblers looking to move money in and out of businesses at high speed, demanding higher perfomances of those businesses, than they themselves could deliver if they ran the business.

Analysts :- People who can predict the obvious future precisely. BTW if they are so good why don't they invest their own money and retire to their desert island..

Why didn't I describe the role of Banks.. Even El Reg has an AUP on language I beleive..

[Nigel 11]

Re: Owners, Stakeholders, Shareholders, Investors, and Analysts..

A little bit unfair to investors and analysts. There are investors who buy expecting to hold for several years or even decades, if the future pans out anything like the way they anticipate.

As for analysts, they are much the same as journalists. They're expected to do a better job of researtching the facts, because people pay £££... for their publications, rather than pennies. They can't always be relied on, just like the press can't always be relied on to have put any facts at all into their stories.

As for bankers: A polite comment is to observe that in some languages, "B" and "W" are not distinguished.

[kmac499]

Re: Owners, Stakeholders, Shareholders, Investors, and Analysts..

"A little bit unfair to investors and analysts. There are investors who buy expecting to hold for several years or even decades, if the future pans out anything like the way they anticipate."

Fair point; I would probably upgrade long term investors to shareholders.

It's the short term buying and selling that annoys me. I beleive it's impossible to build long lived stable profitable businesses if you are forever looking over your shoulder a quarter year at a time..

A Tobin Tax on short term holdings perhaps?

[Nigel 11]

Re: Owners, Stakeholders, Shareholders, Investors, and Analysts..

A Tobin Tax on short term holdings perhaps?

Definitely. Ordinary mortals with only thousands to invest already pay such a tax: stamp duty. It's a scandal that the rich and the institutions are avoiding this tax by trading derivative products instead.

Also no need to have a complicated system for refunding it to a long-term holder. Longterm investors are probably already paying 0.5% stamp duty, so a mere Tobin-level tax would would be welcomed by all but a few of them.

[Jim 59]

Home serve

Long term ARM seems pretty safe, not because of the IoT but because all AV devices are becoming smart, ie. contain an arm CPU, eg DVD players, TVs, digital radios (yuk),...

There will also be a trend towards every home having a low power home server in future, again with the ARM SoC and whatnot. When is somebody going to launch pogoplug-type thing one with a ready integrated Owncloud instance ?

[bed]

Re: Home serve

"There will also be a trend towards every home having a low power home server"?

Maybe not, esspecially with increasing broadband speeds and competitive cloud offerings which somewhat negate the need for in-house facilities.

Meanwhile, the possibility, if not likelyhood, of ARM based servers becoming competitive to X86/64 ones, would suggest there is still a future for ARM beyond peak phone/tablet/IoT.

[jonathan keith]

MOAR MONEY

Where's my MONEY? I want ALL the money NOW!