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ARM profits beat expectations as demand for smartphones rises

"WEARABLE" technology has helped ARM Holdings report better-than-expected first-quarter sales, with the company's technology used in Google's long-awaited 'smart' glasses.

The world’s largest microchip designer said pre-tax profits totalled £89.4m in the first quarter of 2013, a 44pc increase on the same period in the previous year.

The world’s largest microchip designer, which licenses its designs to chip-makers such as Samsung and Apple, said pre-tax profits totalled £89.4m in the first quarter of 2013, a 44pc increase on the same period the previous year. Analyst had forecast profits of £77.6m.

In its first quarter results released this morning, the Cambridge-based company also reported a 28pc rise in revenue to £170.3m in the first three months of the year.

ARM chief executive Warren East said "wearable" technology, which was the "buzz word" of the moment, and digital TVs had helped the company increase its market share, leading to it outpacing the wider semi-conductor industry.

Earlier this month the first batch of the much-anticipated Google Glasses was finished and expected to be shipped immediately. Mr East confirmed that the 'smart' devices contained ARM technology.

"We have developed that category of product and there are relatively few alternatives," Mr East said.

The company is also involved in supplying technology to certain wrist watches, including the Nike Fuel Band, which tracks the user's all-day activity.

While the chief executive did not comment on whether ARM was working alongside Apple on the development of its iWatch, he said that with that type of product, with nowhere to put a battery, it needed technology that was about power efficiency.

"These types of [technologies] already exist at ARM," he said.

One of many mock-ups of how the iWatch, which has reportedly gone into production, might look.

Mr East said the growth in smartphones and tables had also benefited ARM.

"Even low cost smart devices can contain multiple ARM-based chips and be based on ARM's advanced Cortex-A series technology and Mali graphics processors," he added.

With the first quarter results beating expectations, Mr East said the group expected revenues for the full year to be "at least" in line with current market expectations.

Shares in the company rose 7pc in early trading following the announcement.

Last month Mr East, the self-confessed “gadget Luddite” who built ARM Holdings into one of Britain’s most successful technology exporters, announced he would step down on July 1 after 12 years at the helm.

He will hand over the reins to Simon Segars, the company's president, who said he sees huge potential for the company to benefit from the increase in mobile computing, internet infrastructure and servers.

Mr Segars said ARM would keep growing in mobile computing and hoped to capitalise on the so-called “internet of things” by providing technology to connect devices ranging from appliances to vehicles to the web.

ARM, which was founded in 1990, is now the world's leading designer of electronic chips, supplying almost all the world's smartphones and about a third of all mobile computers.

Online Editors