TAIPEI British chip designer ARM Holdings said it will defend its over 90 percent share of the mid-range mobile device market against hard-running rival Intel Corp, helped by a new processor it unveiled on Monday.
ARM introduced the new Cortex A-12 processor optimized for smartphones that sell for between $200 and $350, a mid-range category that the Cambridge-based company said would number half a billion devices a year by 2015.
ARM also expects to see its chip architecture in more wearable devices in the future, such as smart watches which it said could be publicly available this year.
"Wearable and interneted devices are starting to come into the industry," ARM marketing executive vice president Ian Drew told Reuters in an interview ahead of the Computex show fair in Taipei.
"I was riding a bike with a motion detector, and we've demonstrated a fork that has ARM control in it to count calorie consumption ... I suspect sometime this year you'll see one or two (manufacturers) demonstrate smart watches."
U.S. rival Intel, the world's largest chip maker, last month unveiled the most extensive overhaul to date of its Atom mobile processors that underpin its push into smartphones and tablets [ID:nL2N0DN0YY]. Its chips now power a number of devices in the mid-market segment that ARM is targeting with its new processor.
"They are a very big competitor and they're a big competitor to our partners. We have a different business model -- we license IP," Drew said.
"But we're not slowing down. We focus on how we differentiate the industry ... which is why we launched Cortex A-12 and all the graphics and video products around that."
ARM said the new processor would deliver 40 percent more performance than its predecessor, the Cortex A-9, using a similar amount of energy. It expects devices using Cortex A-12s to be on the market by mid-2014.
Chips based on ARM technology dominate mobile computing, from tablets like Apple Inc's iPad to high-end smartphones from Samsung Electronics Co Ltd, and down to feature phones and entry-level devices. It licenses its designs to chipmakers like Qualcomm Inc and Samsung, and in return receives a royalty on every chip shipped.
ARM beat first-quarter profit forecasts, driven by buoyant demand for smartphones and tablets that use its processor technology and the strength of the dollar.
(Additional reporting by Jonathan Gordon in TAIPEI and Paul Sandle in LONDON; Editing by Stephen Coates)