Score, speaking on a teleconference for financial analysts organized by Royal Bank of Scotland late in 2009, said that in the past ARM had typically charged 1 percent of the chip price for the use of an ARM processor core. Score said the royalty rate had moved up to 1.1 percent to 1.2 percent on cores from the Cortex range.

The Cortex brand covers ARM processor cores that adhere to the latest version of the ARM instruction set architecture (ARMv7) and it includes the Cortex-A8 and Cortex-A9 cores that are being aimed at smartphones, netbooks and other consumer electronics applications.

Score said that although the increase in royalty rate may not sound like much it translates into a 10 percent or better rise in royalty revenue which he expected to continue increasing as part of ARM's total revenue.

However, it may take some time for the lift from Cortex to come through, Score said. He pointed out that it takes three to four years for a processor development to start becoming a steady and significant earner for ARM in terms of royalty revenues.

The vast majority of ARM's royalty revenue comes from earlier processor core introductions that achieved design wins in mobile phones. Score sketched this out saying that ARM7 and ARM9 cores are responsible for 94 percent of royalty revenue. ARM11 cores are pulling in 5 percent of processor royalties and Cortex cores are only responsible for 1 percent of the royalty total.

By: DocMemory
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