Jon Peddie Research: Arm’s IPO—background and possibilities

Jon Peddie Research (JPR), the leader for in-depth research in the field of computer graphics, has published a new report ahead of the Arm initial public offering (IPO). The “live” report will be updated as the IPO progresses.

Arm has traveled a rocky road since being acquired by SoftBank. Its sales have grown modestly, and it has severely reduced its head count. It has spun off its Chinese operations and set up a potential competitor, raised its prices in a soft market, and sued one of its biggest customers—how does that make Arm worth $50 billion-plus?

Foundational investors that use its products don’t care—they want a strategy for growth.

In Jon Peddie Research’s new report, written in conjunction with semiconductor IP expert David Harold, readers will learn what the facts are, what the pitfalls may be, who may disrupt, and the most likely strategic developments in product, including a new silicon venture; pricing, designed to achieve a higher share of market value; attitude to China and the ongoing risk around Arm’s biggest customer; and more.

Dr. Jon Peddie, president of JPR, noted, “Customers report they believe they can work their way through the new licensing arrangements Arm is going to impose but are having trouble understanding why they should pay 40% more just so Arm looks good to Wall Street. Arm doesn’t have a plan for organic growth and is trying to squeeze more out of its existing customer base. That will only work as long as they hold a monopoly position, which can’t be forever, and maybe not be much longer.”

Companies discussed in report include:

The above information and more can be found in the new Arm IPO report, which covers:

Table of Contents

• 1.  Executive Summary 4
• 2.  Introduction 5
• 3.  Arm’s Key Challenges—at the Edge and in the Data center 6
  • 3.1 The edge 8
  • 3.2 The data center 9
• 4.  To GPU or Not to GPU, and the Still-Unfolding Story of Arm China 11
  • 4.1 Where is Arm’s GPU in the data center? 12
  • 4.2 The elephant we promised—Arm China 13
• 5.  How to Sell an IP Company 16

Table of Figures

• Figure 1. Arm’s revenue dropped while owned by SoftBank. (Source: FT) 6
• Figure 2. Masayoshi Son. (Source: Wikimedia Commons) 7
• Figure 3. AI market growth over time. 8
• Figure 4. Arm in the data center. (Source: Arm) 9
• Figure 5. Arm thinks the flexibility in its product line will inspire system builders to apply it to data center applications. (Source: Arm) 10
• Figure 6. Arm China’s headquarters. (Source: Architecture Daily) 11
• Figure 7. Where’s the GPU? 13

A total of 95,500,000 ADSs are being offered by the selling shareholder, a wholly-owned subsidiary of SoftBank Group Corp., in the IPO. Arm expects the selling shareholder to grant the underwriters an option to purchase up to an additional 7,000,000 ADSs to cover over-allotments, if any, for 30 days after the date of the final prospectus. The IPO price per ADS is estimated to be between $47.00 and $51.00. Arm has applied to list the ADSs on the Nasdaq Global Select Market under the symbol “ARM.”

Also, as a special bonus to the JPR report, if purchased on or before October 30, customers will receive a free post-IPO update to the report.

JPR also publishes a series of reports on the GPU market, the DCC market, and the PC gaming hardware market, the latter of which covers the total market, including systems and accessories, and looks at 31 countries.

Pricing and availability

JPR’s Arm IPO Report is available now; a single issue sells for $650.

Click here to view the executive summary, table of contents, and more about this significant report or to download it now. For more information, call (415) 435-9368 or visit the Jon Peddie Research website at www.jonpeddie.com.