Last year a whopping 10 billion ARM-based chips hit the market. ARM has seen incredible growth over the last couple of years, its lifetime shipments now stand at 50 billion chips but unlike most processor makers, ARM doesn't manufacture or sell chips directly, it designs general cores that can be licensed by other chip makers like Qualcomm, Apple, NVIDIA and Samsung.
DailyTech writes that despite record shipments, ARM fails to beat analyst expectations due to weak sales of flagship phones, which is the company's most lucrative market:
ARM's processor licensing revenue rose 26 percent to $107.2M USD, beating the analyst expectation of $94.7M USD. But overall licensing royalties came in at just 7 percent growth at $146.4M USD. The up-front fees that ARM gets from customers (licensing revenue) came in at $127.4M USD, less than the Thomson Reuters I/B/E/S average expectation of $137.9M USD.
A major factor in that miss was weak sales of ARM's licensable mobile GPU cores and lucrative A50 Series cores. Both Apple and Samsung Electronics Comp., Ltd. (KRX:005935) (KRX:005930) -- the world's two biggest and most profitable smartphone makers reported lower than expected unit sales of its flagship phones last month.