SANTA CLARA, Calif. — The message from its annual conference here is ARM aims to think and be big in building and securing the emerging Internet of Things, thanks in part to backing from its new parent Softbank.
Masayoshi Son, chief executive of the Japanese conglomerate, came to the event to explain why he paid a whopping 40% premium to buy the core designer. He spared no hyperbole, comparing the rise of IoT to the Cambrian explosion of thousands of species on the planet 500 million years ago.
“This explosion of IoT is definitely coming, bringing the reinvention of many things — transportation, finance, health care — there will be a huge range of opportunities,” he said in a keynote. He predicted IoT revenues will exceed mobile revenues in 2018 and joked a new $100 billion vision fund he is raising, “is not enough, but it’s a good start.”
“What people will see is us making bigger long term bets to accelerate our roadmap [because the Softbank deal] allows us to pursue our ambitions faster and with more scale than we could ever do before,” said ARM chief executive Simon Segars who admitted in an on-stage talk he was surprised when Softbank first made the offer.
Just what big moves ARM will make or when is still not clear.
“The deal closed September 5, so we couldn’t talk before that in any detail, but in the six weeks since then we’ve been talking about things like security and IoT,” said Segars in a press Q&A. Now “the discussions which are regular are about creating the biggest possible outcome,” using ARM’s resources or dipping into those of Softbank, “all bets are on,” he added.
Although it has been acquiring companies at a rate of nearly one per quarter, most of ARM’s deal to date “have tended to be a bit small,” Segars noted. “Masa asks me to think in the biggest possible terms,” he added.
Ironically, few in the rapidly consolidating semiconductor industry lack prodding to think big. During the event, two of ARM’s top partners — Qualcomm and NXP — agreed to a $39 billion merger, the largest in the sector to date.
One big idea apparently on the back burner for ARM is joining the race to define a processor for machine learning. “It’s very early days to define what the right processor architecture will be for artificial intelligence…the algorithms are changing constantly, so it’s too early for the industry to be too specific about it,” Segars said in the press Q&A.
In a keynote, Segars and others talked about the importance of machine learning in the context of ARM’s acquisition of Apical. The deal gave ARM image processing and a fixed-function computer vision block. The later block is not competitive with programmable computer vision blocks provided by rivals Ceva and Cadence, said analyst Linley Gwennap of the Linley Group.
The emerging nature of machine learning hasn't stopped ARM’s archrival Intel from gobbling up FPGA-maker Altera as well as two processor startups in deep learning. Intel plans to roll out its vision for the area at an event on November 17.
Much of the machine learning work is done in the cloud, a highly profitable area Intel dominates. By contrast, ARM’s initiative to break into cloud computing is still nascent, and was kept in the background at the event. The effort continues to incubate, hopeful or market traction in 2017.
Even smartphones got short shrift at the event despite the fact they still make up about 60% of ARM’s revenue. Instead, the focus was on IoT as the next big thing.
The show floor was packed with microcontroller-based IoT demos from ARM partners. Engineers, including the founder of the Raspberry Pi Foundation, told stories of the growing significance of wearables and the rising maker community.
Amid the hype, Segars provided some realistic perspective on IoT. While 95% of companies surveyed in 2013 expected to use IoT in three years, only 75% in a follow up this year said they have felt IoT’s impact and less than half of those companies thought the impact was significant.
Cost, security and lack of management understanding of IoT were the chief barriers, according to the study ARM and IBM commissioned from The Economist and to be released later this year.
ARM’s IoT message arrived just days after hackers used consumer Web cameras and set-top boxes, many run on ARM chips, to stage a bold denial of service attack. ARM executives said the chip-to-cloud security solution it rolled out at the event could prevent such attacks in the future.
Increasing security will be more important in IoT than lowering costs or raising performance, said Masayoshi Son of Softbank. Cars are particularly vulnerable, he noted, given tomorrow’s autos will be connected and today’s vehicles use hundreds of chips, none of them with encryption.
On one demo Segars viewed but declined to name, “security was non-existent, you could see the Wi-Fi password going by — its scare-y bad,” he said.
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