UK chip-designer ARM today emerged as one of the companies set to get a boost from the deal that Apple signed with China Mobile last night, which will see the Californian tech giant's iPhone 5S and 5C go on sale to nearly a billion customers.
Shares in the Cambridge-based company rose 2.5 percent to £10.96 on Monday morning following Apple’s announcement on Sunday evening, due to the fact that ARM's technology can be found in every single iPhone. ARM licenses the intellectual property for its chip designs to manufacturers and receives royalties for doing so.
Marc Kimsey, senior trader at Accendo Markets, said the UK chip architect is poised to benefit from the deal. “[China Mobile] boasts more than 750 million subscribers; put into context, the entire US population consists of ‘just’ 318 million. With ARM technology in every Apple handset, the potential is obvious. Expect to see Apple’s 5 percent share of the $80 billion Chinese smartphone market increase significantly in 2014,” he said in a note.
Apple already sells its phones in China through China Telecom and China Unicom, but a deal with China Mobile, the largest carrier in the country, had eluded it for some time. One reason is that China Mobile uses a different wireless telecommunications standard from its competitors.
On a similar note, the ARM's shares rose 4.5 percent in September when Apple announced its flagship smartphone, the iPhone 5S, would be built on ARM’s technology.
ARM told Techworld earlier this year that its chip architecture can be found in 90 percent of mobile devices around the world.