Wearables: The Cambrian Explosion

Philip Sparks, Investor Relations

Deutsche Bank Wearables Conference
Taipei, June 4 2014

The Cambrian Explosion: 542m Years Ago

The Cambrian Explosion: 2014

Topics
ARMs Products and Business Model
Technology Trends

Wearable Devices
Q&A

From System-in-a-Box to System-on-Chip

CPU
CPU

GPU

PC Motherboard
Modular
Bulky
Power-hungry
5

GPU

System-on-Chip (SoC)
Integrated
Miniature
Battery-friendly

ARMs Business Model

Global leader in the development of Semiconductor IP
R&D outsourcing for semiconductor companies

Innovative business model yields high margins

Upfront license fee flexible licensing models
Ongoing royalties typically based on a percentage of chip price
Technology reused across multiple applications

Long-term, secular growth markets

Over 1000 licenses
Growing by ~100 every year
~350 potential royalty payers
10.4bn ARM-based chips in 13
~20% CAGR over last 5 years

ARM IP For All Device Types

Light OS

Simple OS

Always ON
CPU

Apps.
CPU

ROM

Video
Display
Always ON
GPU
Processor Processor
CPU

Interconnect

Interconnect

FLASH

Enterprise-class OS

SRAM

FLASH

ROM

SRAM
DMC

The ARM Ecosystem

Semiconductor

Vendors
OEMS
Software

Developers
Design Tools
Education and

Training

The ARM Ecosystem : Microcontrollers

3 Billion
Embedded processors shipped in 2013

220+ licenses of Cortex-M processors

Over 3,000 Cortex-M based MCU parts

30+ Real-time Operating Systems

13+ IDEs and C/C++ compilers
21+ Debugger vendors
5+ Graphics UI libraries
mbed prototyping platform
9

Enabling Intelligence Everywhere

Leading in Wearables and
the Internet of Things

10

>95% share of
smartphones
and tablets

Driving the transformation of

network infrastructure and the
data center

Financial Performance
2013 Revenues

$m

Licensing

447.9

285.6

40%

Royalty

558.9

358.3

50%

Other

110.9

70.7

10%

1,117.7

714.6

Total
COGS

94.8%

Operating Costs

326.5

Operating Margin

49.1%

EPS

364.0

Royalties approximately 50% of revenues

Approximately 80% of costs are related to

product development
Revenue growth has driven operating margins
and earnings

20.6

Cash Generation

344.5

Total Cash

706.3

11

95% of revenues earned in US dollars

37.2

Gross Margin

Profit Before Tax

% Revs

Cash generative, debt free

Technology Trends
Driving the Cambrian Explosion in Innovation

12

Trend1: Computing Power at Low Price Points

13

Fast Migration of Features Across Smartphone Segments

2011
Premium Smartphone Specifications

Premium
Smartphone

CPU

ARMv7-A Dual-core Cortex-A9

GPU

Mali-400

Data

3G

Features

8 MP camera, 1080p@30fps video, 2 MP

rear camera, HTML browser

Mid-range/Feature Phone Specifications

Mid-range
Feature-phone

CPU

ARMv6 ARM11

GPU

Data

3G

Features

2 MP Camera, 240 x 260 Pixels, No rear

camera, No browser
Entry-level Phone Specifications

Entry-level
phone

14

CPU

ARMv5 ARM9

GPU

Data

2G only

Features

No front camera, 128 x 128 pixels, No rear

camera, No browser

Fast Migration of Features Across Smartphone Segments

2011
Premium
Smartphone

2014

Premium Smartphone Specifications

CPU

ARMv7-A Octa-core 4x Cortex-A15, 4x Cortex-A7

ARMv8-A Octa-core 4x Cortex-A57, 4x Cortex-A53

GPU

Mali-T760

Data

4G

Features

16 MP Camera, 2160p@30fps video, 2 MP rear camera,

HTML5 Browser

Mid-range Smartphone Specifications

Mid-range
Smartphone

CPU

ARMv7-A Octa-core Cortex-A7

ARMv8-A Quad-core Cortex-A53

GPU

Mali-T720/ Mali-450

Data

3G/4G

Features

8 MP Camera, 1080p@30fps, 2 MP rear camera,

HTML5 browser

Entry-level Smartphone Specifications

Entry-level
Smartphone

15

CPU

ARMv7-A Quad-core Cortex-A7

GPU

Mali-400

Data

3G/2G

Features

8 MP Camera, 1080p@30fps, 2 MP rear camera,

HTML5 browser

Apps Processor

>$15

$10-$15

<$5

Growth Opportunities for Mobile Computing

Smartphones available for <$100

2500

Smartphone and Tablets (m)

13% overall CAGR

2000

Entry-level devices will give billions of

people internet access for the first time

1500

5%
CAGR

Premium
>$400

15%
CAGR

Mid Range

20%
CAGR

Entry-level
<$150

1000
500
0
2013

Access to entry-level smartphones is

Enabling mobile banking

across South America
16

Delivering transformational medical

tools to communities in Africa

Entry Level

2018

Mid-range

Premium

Source: Mixture of ARM and Gartner Estimates

Improving disaster response

and awareness in South-East Asia

Microcontroller Magic 2014

Freescale KL03 microcontroller
ARM Cortex-M0+ processor
48 MHz
32 KB Flash, 8KB boot ROM, 2 KB RAM
35uA/MHz low-power active mode
1 uA sleep mode

2mm x 1.6mm

Photo with permission Freescale Semiconductor

17

Trend 2: Intelligence Everywhere

18

Computer + Sensor + Connection

Motion
Location
Proximity

Humidity
Temperature
Vibration
Weight
Noise

Processor and
electronic sensor

Communications
link to a remote
server

Pulse Rate
Power
Fuel Gauage

19

Making Everything Intelligent

SD card contains WiFi/Cortex-M3

FCC certified: allows rapid retrofit

20

Smart retrofit for steam apartment heating

6 building trial showed >15% energy saving
Enabled compliance with Local Law 87
31,000 steam heated buildings in the Bronx alone

The Internet of Things

Everything Connected
Autonomous, intelligent sensors

All Data Analysed

Centralised storage and processing

Low Cost Nodes

End-to-End Solutions

Billions of Things

Easy to set up, stringent security

21

Trend 3: Everyone Can Innovate

22

A New Era of Embedded Development

23

Assembler

Platform

1990s

2000s

2010s

ARM mbed - Accelerating IoT Deployment

Rapid, professional IoT device development
An open source platform and libraries for

Cortex-M

microcontrollers

MCUs

Mix & match components for your design

Microcontrollers, Radios, Sensors, Software stacks
Bluetooth, 802.15.4/6LoWPAN, WiFi, Cellular
radios

Simplify integration with cloud services

Embedded agents and APIs for cloud services
sensors
24

1,000,000+
mbed.org unique visitors in 2012

100,000+
mbed-enabled development
boards shipped

100+
Major OEMs from
diverse industries
are using mbed

110,000 Makers

MAY 17-18, 2014

Low Cost Development Boards

25

Enabling the Community

The Rise of the Hardware App

Pebble Watch
Smart watch

26

Fitbit One
Activity + sleep tracker

Parrot AR.Drone
Quadrocopter

August
Home security

GoPro
Hi-Def Personal
Camera

Wearable Technology

27

Example Users & Use Cases

28

Professional

Elderly

Industrial

Office

Pets

Animals

Lifestyle

Sports

Teenagers

Extreme sports

Health

Kids

Challenges
Small form factor and battery size
What is using the battery?

WiFi
Bluetooth
GPS
Sensors
UI
Applications

Markets are still developing

Use cases are still emerging

2600
mAh

250
mAh

How does the user interface with the device? Does it need always-on connectivity? Can it rely on a remote server?
29

Industry Always-on, Always-Aware Architecture

A Sensor Hub brings monitors the environment even when the Apps Processor is in standby
Temperature
GPS

Magnetometer

Application
Processor

Sensor Hub API

Accelerometer

Sensor
Hub

Gyroscope

Rich OS & Apps

Sensor Fusion,
Averaging, filtering,
calibration long
term trends,
event alarms,
use case learning etc.
30

Touch

Microphone
Luminance

Basic Device Architecture

Basic Wearable

ARM Cortex -M Low Power Processor

On Chip Memories
Embedded Flash
SRAM
ROM

Low frequency CPU (20-150 MHz)

Always-on sensor fusion
Months of battery life

LCD
E-ink
OLED

Always on
Cortex-M

Bluetooth
WiFi

Interconnect

LEDs
FLASH

ROM

SRAM
MEMS

31

ARM Cortex-M Product Line

Performance efficiency
Feature rich connectivity

Digital Signal Control

Processor with DSP
Accelerated SIMD
Floating point

Lowest power
Outstanding energy efficiency
Lowest cost
Low power
8/16-bit Traditional application space
32

16/32-bit Traditional application space

High-end Device Architecture

High-end Wearable

ARM Cortex-A7 MP Application Processor

Dual-core cluster for scalable performance

Low active power
Low power modes to reduce standby power
Energy efficient L2 subsystem
Energy efficient NEON engines /Audio & DSP

Always on
Cortex-M
Cortex-A7 MP
CPU1

CPU0

256KB L2

ARM Mali-400 MP GPU

ARM Cortex-M Ultra low power sensor fusion

processor

Low power
bridge

ARM Mali- V500 Video Engine

LPDDR for lower memory power consumption
33

Mali
DP500

Interconnect (CoreLink NIC-400)

Mali
V500

Bluetooth
WiFi
LEDs

FLASH

ARM Mali-DP500 Display Processor

Mali
400

LCD
E-ink
OLED

ROM

DRAM
MEMS

Power-efficient Cortex-A CPUs for Wearables

34

ARMv7-A
8 stage in-order
Single issue
AMBA 3
UP and MP configurations
External L2 cache

ARMv7-A Extensions
8 stage in-order
Partial dual issue
AMBA 4 ACE
Integrated L2 cache

Source - www.ifixit.com

Activity Tracker
Microcontroller
ST Microelectronics / STM32L151C6
ARM Cortex-M3 processor

Accelerometer
Battery charger IC
Texas Instruments / BQ24040

Bluetooth IC
Nordic Semiconductor / nRF8001

Beyond the price and performance benefits, the engineering team enjoyed the code density
offered by the ARM 32-bit part

- Interview with FitBit CEO, James Parks, source - www.designnews.com

35

Source - www.ifixit.com

Smartwatch
3-axis accelerometer
ST Microelectronics / LIS3DH

Microcontroller
ST Microelectronics / STM32F205RE
ARM Cortex-M3 processor

3D digital magnetometer
Freescale / MAG3110

Bluetooth module
Texas Instruments / CC256x
Panasonic / Pan1316

36

Mobile Smartwatch
Omate TrueSmart

Application processor
Mediatek/ 6572A
Dual-core ARM Cortex-A7 processor
ARM Mali-400 GPU
Bluetooth/ WiFi

9-axis accelerometer, gyro

Invensense/ MPU-6050

37

Life Logging
GoPro HERO2 camera
Source - www.ifixit.com

Power management
Austriamicrosystems / AS3713

Microcontroller
Freescale / SCK20DN51Z
ARM Cortex-M4 Processor

Camera SoC
Ambarella / A770
ARM11 Processor

Bluetooth 4.0 / 802.11n

Qualcomm Atheros / AR6233

38

Wearable Revolution Built using ARM IP

Oakley Airwave

39

ARM - Enabling The Cambrian Explosion

26 Billion
installed units
by 2020*

Key Enablers
Low-power CPUs and

GPUs for devices with

small batteries and
extended use periods
A broad ecosystem that

Ambitious and capable

Semiconductor Partners

Volume

supports rapid, open

development

Device Categories
40

Thank you for listening

Philip Sparks
ARM Investor Relations

41