[ca01an]

What exactly has happened to them under SoftBank that caused their margins to drop so much? I have no idea why they can't turn a decent profit, given that, as you said yourself, the market is more dependent on their reference designs and core IP than ever.

[dogma1138]

My guess is that it was because their revenue relatively remained flat whilst R&D expenses inflated as they always do with more and more advanced SoCs and processors.

https://www.statista.com/statistics/1132064/arm-quarterly-ne...

If ARM was only about the instruction set and high level IP it wouldn’t be an issue but they develop full designs and those are the ones that get implemented by most users.

Considering the exponential growth in ARM processors and SoCs in mobile devices and IOT/IOE devices since SoftBank acquired ARM it’s really a mystery tbh on how the hell they mismanaged them so badly that they didn’t managed to capitalize on an exponentially growing TAM.

They kinda flatlined before that too but at least they had a steady growth rate in the years prior to the acquisition.

Something went wrong somewhere.

[paulmd]

I think it's not a huge mystery, it's exactly what people are talking about higher in this thread or elsewhere in the discussion: the business world has gotten used to treating ARM as an at-cost utility, and there's significant business risk to ARM attempting to shift that model to a more revenue-focused one. Few quotes from around this thread:

> ARM got to where it is by not being too greedy. If others perceived them to be making power grab then a lot fewer people would have been willing to stake their own futures on the architecture.

> No, it shouldn’t. ARM is ARM precisely because it doesn’t charge a huge amount - if it did, it would not be as widely used.

ARM has managed to be successful by becoming a "public utility" that does their work essentially at-cost, which is then monetized by their customers. Everyone agrees that ARM generates a ton of value, but almost all of it is captured by their clients. And the problem is - the customers that were slippery enough to escape other ISAs to ARM are generally slippery enough to do it again if it becomes worthwhile.

You said elsewhere that there's other avenues to raising revenue without customers paying it and I'm curious what you mean, because that really seems to be the problem. I don't really see what you mean - for ARM to make more money, it has to be coming somewhere, and even if it wasn't up-front architectural/SIP licensing fees directly (even if it was, let's say, per-device licensing fees at time of manufacture/sale - like the HDMI Consortium does) those costs are still coming from somewhere and ultimately borne by consumers. It doesn't really matter to me whether I pay $1 a phone for incremental licensing or pay $1 a phone to amortize Qualcomm's license for ARM IPs, it's still the same money either way.