ARM Holdings plc (ADR) (NASDAQ:ARMH) boss Simon Segars is confident in innovation in the smartphone industry, he expressed in an interview on CNBC.
The comment comes from the ARM Holdings plc (ADR) (NASDAQ:ARMH) CEO as it was pointed out in the interview that analysts have been wary of the smartphone business because Samsung Electronics posted weaker sales in these devices for the last quarter.
ARM Holdings plc’s (ADR) (NASDAQ:ARMH) income is significantly made up of its royalties it gains from manufacturers which makes use of its designs for chips for their smartphones. Its chip designs are dominant in the smartphone industry in terms of market share.
Asked what the cycle for the smartphone market is in light of comments coming from industry observers that the high-end of the industry is saturated, ARM Holdings plc’s (ADR) (NASDAQ:ARMH) CEO said that he believes there will be further innovation. He was asked the question because even though comments of saturation are continually being made, observation points to players like Apple Inc. (NASDAQ:AAPL) being able to hype their high-end devices still and reinvent and reinvigorate the market even if competition is tough. According to Segars:
“I strongly believe that it will continue to be innovation all across smartphones. In the high end, you will see more features, more sensors, more ways in which people interact with their devices and the way in which the devices works out – what you need and what you do even before you’ve realized it. At the mid-range of smartphones, we see very strong growth. In entry-level smartphones, similarly, we’re seeing very strong growth as devices become really low cost. That opens up markets in developing countries.”
At the start of the interview, the ARM Holdings plc (ADR) (NASDAQ:ARMH) chief was asked whether the current market conditions which is seeing lower demand for chips that use their design is a trend or a cycle. He also talked about why his company is well-positioned in the industry even if current short-term indicators point to threats. Watch the video below.