ARM Looks to Sun

Electronic News, July 2, 2001 by Gale Morrison

Java processing seen as key to holding OEMs

Looking to keep hold of its 75-plus percent share of the wireless handset microprocessor market, ARM Ltd. of Cambridge, England, last week reported a much broader collaboration with Sun Microsystems Inc. of Palo Alto, Calif., to see that many future ARM microprocessor cores are optimized to run Java applications.

To ARM, part of ARM Holdings plc (nasdaq: ARMHY), and Sun (nyse: SUNW) the key is insuring that the wireless communications industry can purchase their hardware and software as they want it, and when they want it. Higher-bandwidth wireless communications are being engineered now, and network builders as well as consumer device makers are looking to Java to allow users to pick up e-mail and otherwise interact with the network.

"We have heard loud and clear from (wireless handset) manufacturers that they do intend to deliver Java applications to their customers," said Reynette Au, general manager of ARM Inc., the company's U.S. subsidiary.

"There will be 20 million to 25 million handsets shipped this year that are powered by Java applications," said Rich Green, vice president for Java software at Sun. "The CEO of Nokia recently estimated that 100 million to 200 million Java-powered handsets will ship in 2002 and 2003," Green said. Sun is anticipating a good reception for the "J phones" that Japan's NTT DoCoMo and Korea's LG Group will roll out late this summer, he added.

The semiconductor meaning to all of this is ARM's astounding success so far in penetrating the wireless handset CPU market. Now, as the wireless phone morphs into the wireless PDA and phone, the company faces fierce competition from the likes of Intel Corp. -- with its StrongARM-derived XScale architecture--and renewed Motorola Inc. efforts such as Dragonball and the joint Motorola/Agere Systems Inc. efforts around StarCore.

ARM has already released an ARM7 and an ARM9 core with what it calls a Jazelle Java accelerator. This deal means the engineering will go deeper, with a vast swath of ARM's field of processor cores to be engineered to mate with the Java 2 Micro Edition (J2ME) software, Au and Green said. That should be enough to keep handset OEMs such as Nokia and Ericsson happily in the ARM camp, which in turn keeps ARM semiconductor licensees such as Texas Instruments Inc. happy.

Interestingly, ARM's success has been so great that company executives are careful, like Intel and Microsoft, not to raise antitrust hackles in their communications to the public. In a teleconference last week, Au and Green gingerly discussed ARM's strong, pre-eminent and significant position in wireless device CPUs to explain what this deal means for the proliferation of Java in wireless computing. They did not go near words such as "dominant" or phrases such as "owns the market," though ARM could comfortably say both.