ARM and SoftBank Aim to Become Pioneers in IoT

ARM in the IoT market

In the previous part of this series, we discussed how ARM Holdings (ARMH) designs chips that are used in almost all smartphones across the globe. Intel’s (INTC) Atom processors could not compete with ARM’s power-efficient, low-cost processors in the mobile space. Using ARM-based chips, Qualcomm (QCOM), Apple (AAPL), and Samsung (SSNLF) have dominated the mobile processor market.

ARM and SoftBank Aim to Become Pioneers in IoT

Now ARM is moving toward IoT (Internet of Things) and has already gained a 26% share in the IoT market. The company expects to gain a 50% market share by 2020, growing at a CAGR (compounded annual growth rate) of 7%.

A consortium led by ARM and Symantec (SYMC) developed a draft security protocol OTrP (Open Trust Protocol) for IoT devices. Notably, Qualcomm has developed several ARM-based SnapDragon processors for wearables, automotive, and drones. But ARM’s low-power processors with minimal computing are perfect for IoT devices, as compared to Intel’s x86 processors, which deliver high computing but are power-hungry.

Robots

In 2016, SoftBank launched “Pepper,” a robot that understands human emotions, needs, and interests by interacting with them. Pepper has been developed by SoftBank’s subsidiary, Aldebaran Robotics, and uses IBM’s (IBM) Watson machine-learning platform to understand human emotions. Pepper is manufactured by Foxconn Technology, which manufactures Apple’s iPhones.

Cars

Recently, SoftBank partnered with automaker Honda to develop an artificial-intelligence system in autonomous and semi-autonomous cars that can understand a driver’s emotions by monitoring speech patterns and using sensors and cameras. Honda would work on this technology at its development center in Japan, which is scheduled to open by September 2016.

ARM’s chip designs would thus likely boost SoftBank’s efforts in the IoT space. SoftBank CEO Masayoshi Son has said that “Within 20 years, ARM is going to scatter one trillion chips around the globe, gathering all the real-time data instantly.”

For this reason, the entire semiconductor industry is eyeing the IoT market due to the strong growth opportunities presented by the segment. We’ll look deeper into this potential in the next part.