By Lisa Fleisher
ARM Holdings PLC, whose chip designs already dominate the
smartphone market, is making a push to get its technology into the
next wave of connected objects.
Britain-based ARM on Wednesday introduced an operating system
and a software system to manage data that it believes will smooth
the way for companies to start churning out products connected to
the Internet, a semiconductor market that analysts estimate could
be valued at as much as $50 billion by 2020.
While ARM doesn't have the global name recognition of Cisco
Systems Inc. or Intel Corp., its chip designs are found in more
than 95% of all smartphones. It designs the basic architecture of
the chips, which are then made by the likes of Qualcomm Inc. and
others.
ARM traditionally earns its money in two ways: selling
intellectual-property licenses for its designs to manufacturers,
and charging royalties when the chips ship.
Company officials see big growth in an area known in the
industry as the Internet of Things. The announcements on Wednesday
came a week after the company announced a new, more powerful chip
design for connected devices.
The promise of connected objects has been kicking around for
more than a decade, as technologists described the potential
benefits of remotely controlling thermostats, monitoring heart
rates and keeping an eye on supply-chain conditions. But only
recently have companies begun to make and market products.
One reason, ARM officials say: It takes too long to create
software to get started, and it is too hard to manage all the
information once it is gathered. ARM is hoping its latest products
speed things up.
"You can have a lot more, smaller companies innovating," said
Patrick Moorhead, president of Moor Insights & Strategy, a
high-tech analyst firm based in Texas. "To me, that is a snowball
effect where that leads to more innovation and more people doing
really cool stuff."
The operating system, called mbed OS, is the first for ARM,
which has been developing silicon technology for nearly 25 years in
Cambridge, England, that serves as the blueprints for the chips
that provide computing power for many commercial products.
Like the OS for a smartphone--for instance Apple Inc.'s iOS or
Google Inc.'s Android, which are the software interfaces between
the user and devices--Internet of Things operating systems control
the basic functions of a device.
The mbed OS will be available on chips designed by the
company.
The other component--software to manage the data and
devices--opens the door to a new line of revenue: software that can
be used with chips, regardless of whether they are running on
ARM-based chips.
"They can go in and make money at different points of the
process where they hadn't made money before," Mr. Moorhead
said.
Research firm Gartner Inc. estimated that the semiconductor
market for the Internet of Things will be $10 billion to $13
billion in 2015, rising to $45 billion to $50 billion by 2020.
Currently, there are several companies that have created
operating systems for the small, low-power chips that are necessary
for everyday objects. The operating systems have to be tiny,
perhaps doing as little as one task. A device might need to wake up
every few minutes, take a temperature reading and send it out, said
Andrew Markham, a lecturer at the University of Oxford.
"There are all these weird and wonderful operating systems," he
said, but no go-to choice, he added.
Write to Lisa Fleisher at lisa.fleisher@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires