It did so because Nokia’s CEO Jorma Ollila believed that a single manufacturer should not dominate the mobile industry in the same way as Intel’s x86 processors at that time dominated the PC industry.
ARM’s IP licensing model, whereby the key component in a mobile phone could be made by many manufacturers, bestowed interoperability on the mobile industry without giving monopoly control to any one manufacturer.
Nokia’s dominance meant that the mobile industry standardised on Arm and, for 33 years the Arm model worked well – until yesterday – when Arm announced a proprietary discrete processor. From now on Arm is competing with its customers.
The customers may be preparing to flee – as Qualcomm appears to be doing while an alternative in RISC-V appears to be gaining traction in China, as Alibaba’s processor launch on Monday showed.
Arm thinks it can increase its revenues by 5x with this strategy but it is risking its IP revenues to get there. Who wants to compete with the licensor of a technology they depend on?
If Arm now extends this strategy by launching proprietary discrete processors for mobile, where the Arm architecture is dominant, then a key segment of the electronics industry will end up with another monopoly manufacturer like Intel in PC about which, three decades ago, the mobile industry was saying thankfully: “Never again”.
Interesting move for sure. If they stick to one segment with one device type then it may be ok.