Jefferies has raised its target price for ARM Holdings from 466p to 485p but has maintained its underperform rating on the chip designer ahead of its first quarter results due next week.
"ARM is about to exit a no-new-news-phase with heavy reliance on Windows on ARM (WoA) and Mali graphics royalties into 2H12 - neither can materially lift fundamentals from here and the former may yet have sentiment tailwinds," the broker said.
"Investors have not abandoned the theme on this name but we think a lack of visibility on the long term potential has stymied sentiment."
ARM, Gemalto and Giesecke & Devrient announce the creation of a joint venture
CAMBRIDGE, UK - APRIL 03 2012
ARM, Gemalto and Giesecke & Devrient today announced the creation of a joint venture dedicated to delivering a trusted, secure environment for advanced services running on smartphones, tablets and other smart connected devices.
Each of the three companies is contributing assets to the new independent company, including patents, software, people, cash and capital equipment. ARM is providing working capital and employees, mainly engineers and market development staff. The cash contributed by ARM is not significant in the context of ARM's balance sheet.
ARM will own 40% of the joint venture, with Gemalto and Giesecke & Devrient owning 30% each.
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Qualcomm's Quad-core Chips to Counter Intel's Ultrabooks
Mar 30, 2012 6:00 pm
Qualcomm is preparing a quad-core version of its Snapdragon S4 chip for thin and light Windows 8 laptops, which the chip maker hopes will steal some thunder from Intel's second wave of ultrabooks due later this year.
The S4 chips will go into laptops that are thinner and lighter than Apple's MacBook Air or today's ultrabooks, according to Rob Chandhok, senior vice president at Qualcomm. Ultrabooks are being promoted by Intel as a new category of thin and light laptops.
"We think much lighter than what Intel calls an ultrabook," Chandhok said.
The lines between high-end smartphones, where Qualcomm's chips are normally found, and laptops has started to blur, Chandhok said. The S4 chips will enable smaller laptops with high-resolution screens, longer battery life and always-on connectivity, he said.
The chips are based on a core from U.K. chip design company ARM, and include an integrated modem and a graphics core capable of handling 3D graphics.
Just as Intel hopes to make microprocessors for smartphones, Qualcomm is trying to expand out of the smartphone market and into PCs. It has already shipped some prototype Windows 8 PCs with Snapdragon chips to developers. But Intel is moving against the ARM-based vendors by pouring millions of dollars into developing ultrabooks.
Qualcomm hopes Snapdragon laptops will be differentiated by their 4G connectivity and strong multimedia qualities, Chandhok said.
The S4 will be manufactured with a 28-nanometer process, improving power efficiency and performance compared to earlier Snapdragon chips, Chandhok said. While ARM chips often provide longer battery life, they generally pack less performance than Intel's Core processors.
Qualcomm is also thinking about 64-bit support on Snapdragon, but Chandhok couldn't reveal when such a chip would be released. Windows 8 will be a 64-bit OS, and ARM has already announced 64-bit support with its upcoming ARMv8 architecture.
Having a powerful Snapdragon chip with four CPU cores and multiple graphics cores will make a difference for Windows 8 devices, especially for applications like games, Chandhok said. Windows 8 can improve application performance by executing programs in parallel across multiple cores, and Qualcomm is working on compilers to parallelize program execution for everyday applications like browsers.
"There will be maturation on the software," Chandhok said.
Aside from makers of x86 chips, Qualcomm will compete with ARM-based chip makers Nvidia and Texas Instruments, which are also supplying chips for Windows 8 tablets. While many basic features will be similar, Qualcomm will try to differentiate its chips by developing software that plays to unique multimedia and cellular connectivity features on Snapdragon.
"In this day and age, the instruction set matters," Chandhok said.
According to analysts at International Data Corporation, nearly 1 billion “smart devices” were shipped, racking in $489 billion in revenue. Shipments of smartphones, tablets, and even PCs are expected to grow to 1.1 billion this year and will reach 1.84 billion by 2016. The number of shipments has doubled since 2011. Forecasts indicate Google’s (NASDAQ:GOOG) Android and Apple’s (NASDAQ:AAPL) iOS will contribute to the decline of traditional Microsoft (NASDAQ:MSFT) Windows computers. Android-based devices running on ARM (NASDAQ:ARMH) CPUs are estimated to reach 31.1 percent of total shipments this year, more than either iOS or Windows (x86). In 2011, Windows PCs (x86) led with a 35.9 percent market share, while Android on ARM CPUs held a 29.4 percent share. Meanwhile, iOS held a 14.6 percent share, but by 2016, iOS is estimated to reach 17.3 percent, Android will reach 31.1 percent, and Windows is expected to drop to 25.1 percent. However, forecasts don’t guarantee a victory for Android. IDC claims that hardware vendors in the market will find it difficult to find success because of the cheaply priced devices. Despite iOS’s smaller market share, iOS is expected to attract a large percentage of developers simply because iOS users, having already paid more for their devices, are more willing to pay for mobile apps. IDC is dubbing the new era “PC Plus,” implying multiple devices, rather than the end of the PC entirely.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
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