Smartphones will become more expensive all over the world – Arm has decided to significantly increase the prices of its developments

Since the main owner of the British Arm holding remains the Japanese corporation SoftBank, a significant part of business ideas comes from this source. Apparently, the desire of shareholders to increase the profitability of Arm’s business at a certain point gave rise to a long-term program to increase royalty rates, which provides for an increase in annual revenue to $1 billion over a period of more than ten years.

Image source: Qualcomm Technologies

At least, such plans of Arm are disclosed by Reuters with reference to materials from the closed part of the hearings on the trial between Arm and Qualcomm, which are arguing over the latter’s right to use Nuvia’s developments when releasing processors for PCs of the Snapdragon X family. Royalty rates for customers in case of implementation This strategy could increase by 300%, judging by the case materials. The corresponding plan, which has been hatched since 2019, received the symbol Picasso.

Once again, mention is made of the fact that about three years ago, Arm management considered the possibility of the company entering the market with processors of its own design. Let us remember that until now Arm made money by allowing third-party clients to use its architectural solutions to create their own processors, or by providing them with ready-made blocks to speed up the entry of new chips into the market. The company itself does not intend to supply processors under the Arm brand, as CEO Rene Haas now claims, and the corresponding plans have been considered for several years only as a “testing the waters.”

During the trial, details of Arm’s interaction with its close clients also became clear. In October 2022, executives from Arm and SoftBank made it clear during a meeting with colleagues from Samsung that Qualcomm’s license to produce Arm-compatible processors would expire in 2025. Concerned by such statements, Samsung representatives turned to Qualcomm, and they had to reassure the Korean chip buyer that the Arm license was valid until 2033. However, amid uncertainty, Samsung still limited the duration of its chip supply agreement with Qualcomm to two years instead of three.