Types of License

Although I wrote about there being three high level license types (processor, POP and architectural) in reality there’s a spectrum of options that ARM offers.

Academic licenses are effectively free. You can’t sell any designs but it’s a great way to build familiarity with an architecture. DesignStart is a low cost option for an academic/research arm of a company. Again, neither of these designs can be sold which is why the up front fee is very low/effectively zero.

ARM offers single use licenses for companies who just need a particular core for a single project (e.g. I want to build a single design based on the Cortex A9). A single use license for a Cortex A-class CPU will be somewhere around $1M up front plus ~2% per chip sold. The single use licenses are really useful for startups or very specific design needs within a company.

Multi-use licenses make a bit more sense for larger companies with multiple products. Here you get a larger up front fee but you can use your licensed CPU design within any number of products within a certain period of time (e.g. 3 years). During that time frame you can design as many products as possible, but you cannot begin any new designs after the 3 year period ends without a license renewal.

Perpetual multi-use licenses are more common in larger companies. These allow the licensee to use a core in any number of devices, indefinitely. As some ARM licensees can keep the same core in use for 10 - 20 years (particularly in industrial applications), the perpetual multi-use license gets a fair bit of use.

The subscription license is quite possibly the most interesting out of the pyramid. Companies can purchase a subscription license to ARM’s entire portfolio of products, for a set number of years. What a subscription license really enables is engineering managers within a company to start a chip project without having to worry about asking for budget for a large up front license fee since the company as a whole has already paid it. The up front fee here is multiple times the $10M top end for a standard part, for obvious reasons.

Finally at the top of the pyramid is an ARM architecture license. Marvell, Apple and Qualcomm are some examples of the 15 companies that have this license.

The Chosen Three

Since ARM doesn’t actually make any chips of its own, it needs to ensure that for each generation there are launch partners that will produce designs based on the latest and greatest. For each new microprocessor IP, ARM chooses up to three partners to work very closely with. The reason for choosing three is to hopefully work with companies targeting multiple markets. We tend to focus on the high-end smartphone/tablet SoC space here, but ARM architectures find their way into industrial, digital home, TV and other markets as well.

These companies get earlier access than any other licensee to whatever new microarchitecture ARM is working on. The licensees in exchange help debug and test the IP, even providing feedback directly to ARM. The benefit to the licensee is the potential for a significant time to market advantage on the new microarchitecture.

How ARM Makes Money Market Share & Final Words
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  • Spunjji - Friday, June 28, 2013 - link

    I think you'll find that for the vast majority of users it probably is. I know that I am a distinct minority in spending more than ~£120 on a monitor for a desktop PC, and notebooks are now the dominant segment in PC sales where the cost of the display is going to be reduced compared to a desktop unit.
  • name99 - Friday, June 28, 2013 - link

    Look at an MBA. That's a far more representative type machine than a multi-screen desktop. That's what, $1200 or so, of which, what, $3..400 or so is Intel.
    No-one else is close. The display is, what, maybe $100 at the most. The storage is maybe $200 at the most (being charitable in both cases).

    Lower end laptops which are still using Intel are cheaper and so the fraction is even higher.
  • madmilk - Friday, June 28, 2013 - link

    In the PC world, the usual display is a $70 (eBay panel pricing, which is definitely an overestimate of BOM costs) 1366x768 display, or maybe a $140 1920x1080 display for nicer laptops and desktops. Even the rMBP 15 panel is only $300. In comparison, Core i5 processors start at over $200, and are very common in anything mid-range or above.
  • lukarak - Friday, June 28, 2013 - link

    All of the iOS devices are Arm based as well. Apple just designs their own processors based on the ARM instruction set, like Qualcomm with Scorpion and Krait, and unlike Samsung, NVIDIA or TI.
    Also, all WP are also ARM based.
  • aryonoco - Friday, June 28, 2013 - link

    I know it's OT, but since others have mentioned, I thought I'd add my voice as well: I miss the podcast. I REALLY miss the podcast :-)
  • Deepak Chamarthi - Friday, June 28, 2013 - link

    Nice info , Thanks Anand. Indeed ARM like companies needs this type of dynamic model. Mobiles everywhere -:)
  • dishayu - Friday, June 28, 2013 - link

    So, who would the chosen 3 be? I can guess Qualcomm and Samsung. Which one's the 3rd? Apple? TI? nVidia?
  • PEPCK - Friday, June 28, 2013 - link

    Wouldn't be Qualcomm or Apple, as they only use the ARM architecture, preferring to build their own designs. TI is a partner for the A15, but is unlikely to be for future chips, due to their retreat from the high performance SoC business.
  • dishayu - Friday, June 28, 2013 - link

    Hmm... But then same logic should apply to Samsung and their Exynos chips as well.
  • Ryan Smith - Friday, June 28, 2013 - link

    Exynos uses standard ARM core designs though. Whereas Snapdragon and A6 (and beyond) are using custom core designs. There's a big difference between a custom chip using standard cores, and a chip using custom cores.

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