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ARM’s next big opportunity is in really small devices

ARM’s (s armh) CEO Sir Warren East is casting his eye on the next big opportunity for the chip architecture firm — the Internet of things. In an interview with the Mobile World Live team published today East says he anticipates the market for embedded chips to be ten times the market for mobile device chips such as applications processors.

He said:

If you add up all the smartphones and the tablets and the digital televisions and the PCs… and cast your eye forward a few years we see a large opportunity of perhaps 3 billion to 4 billion units per annum, but we see an embedded market that’s maybe 30 billion to 40 billion units per annum, and so that’s where we get the factor ten.

This seems in line with comments from Ericsson’s CEO, who sees 50 billion connected devices by 2020, and confirms an interest and market direction that ARM has been hinting at for some time. For example, ARM is an investor in Ambiq Micro, an Austin, Texas-based company making a real-time clock component that uses an ARM microcontroller. ARM generally makes an investment in companies in areas where it wants to help seed the use of its architecture, such as its investment in Calxeda to push ARM into servers.

And Tuesday on its financial results call, East said that the microcontroller products are growing by 35 percent year over year while overall industry shipments were down 10 percent. When comapred to the previous quarter both microcontroller and mobile shipments were down but East downplayed that, highlighting the future for ARM in the microcontroller space. He said:

At the end of 2011, our market share was approximately 10 percent in microcontrollers. We do see that continuing to grow over the years and Cortex-M is a serious driver. And as I mentioned in the introduction, Cortex-M0+ will help accelerate that by really opening up the opportunity to replace very small, very low power 8-bit microcontrollers.

For those wondering, the microcontroller is the dumbest of silicon, holding only a few bits of information. They are cheap and found in everything from washing machines to lab equipment. But when we think about connecting sensors to everyday objects, microcontroller may have their day in the sun. They don’t cost a lot, but if ARM microcontrollers get a large foothold in a market that needs billions of chips, that’s nothing to scoff at.

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