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The Rise Of ARM At CES

|Includes: ARM Holdings, plc (ARMH)

Historically CES has never had a tremendous mobile focus, and has therefore been much less relevant to ARM investors than something like Mobile World Congress. However, as non-mobile devices become ever more connected (and the internet of things begins to truly manifest) it is likely that CES will become more and more ARM centric. AT CES 2013 one of the undeniable trends is smart TV's powered by multicore SOC's. While smart TV's as a category have had somewhat of a mixed start with consumers, the one feature that has been a resounding success is the ability to offer easy access to the multiple streaming platforms (e.g., Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), Hulu, Vudu, etc.) This functionality typically requires a CPU/GPU SOC both to decode the streams and to provide a smooth graphically rich UI (a major weak spot with many early products).

With Intel having retreated from this market before it even matured, and with the effective demise of MIPS (for whom home entertainment products was a rare bright spot), ARM appears to be becoming entirely dominant in the living room. For example, a cursory glass around the smart TV launches reveals all 2013 LG models feature dual core ARM SOC's, while all Samsung models are similarly equipped with the higher end models actually featuring quad A15 solutions. Many of these SOC's also feature Mali GPU's and indeed it may be that smart TV growth has been as much of a driver of Arm raising its 2012 Mali volume expectations (from 100M+ to 150M) as does the presence of Mali in Samsung smartphones.

Bottom line, while Arm is often (rightly) considered as a smartphone play with compute and server aspirations, AV products have become another vibrant market for ARM technology that is paralleling the smartphone market in its adoption of multi-core SOC's.

Disclosure: I am long ARMH.