ARM has just published their Q3 2012 financial results. They're spectacular. Revenues are up 20% year on year to 144.6 million British pounds, profits are up 22% year on year to 68.1 million British pounds, and more and more companies are licensing the Mali graphics processor.
Just to recap, how exactly does ARM make money and how does that differ from Intel? Let's start with Intel, because their business model is easier to understand. Intel designs processors and then builds them in their own factories. Translation: They make physical goods that they then sell to people. ARM on the other hand, they create blueprints that any company can then use. ARM licenses not only their own processors, stuff like the ARM Cortex A9 or A15, but they also license their complete architecture. In other words, if a company wants to design their own chip that's compatible with code written for ARM processors, ARM will gladly do business with them. The two most notable companies that do that are Qualcomm and more recently Apple.
So besides making money hand over fist this quarter, what else did ARM announce? They said that someone signed an ARMv8 architecture license, which means someone is designing a processor that's compatible with ARM's next generation instruction set. What's so special about ARMv8? It's 64 bit enabled, which means it can address more than 4 GB of RAM. Now today you might think a smartphone with 4 GB of RAM is insane, but the Galaxy Note II and LG Optimus G (Nexus 4) both already come with 2 GB of RAM. Doubling that will happen in less time than you think!
Right now the fastest smartphone you can buy today is the Note II. It has four ARM Cortex A9 cores. In less than six months we're probably going to see the first smartphones being unveiled that take advantage of ARM's new Cortex A15. Those devices will have “only” two cores, but those two cores are going to pull some benchmark numbers that you're not going to believe.