For nearly every smartphone that ships, Arm Holdings (NASDAQ: ARM) gets a small piece of the sale. The same is true for a big chunk of the consumer electronics market. ARM estimates that the value of chips containing its technology was nearly $100 billion in 2022. The company generated about $2.7 billion in revenue during fiscal 2023 through licenses and royalties.

In the smartphone market, Arm's market share exceeds 99% and has done so for many years. The company's chips are also prolific in the consumer electronics market, although not quite as dominant. It would be an ordeal for a customer to switch chip architectures. reportedly began testing custom Arm processors for its Mac computers in 2014, but it wasn't until 2020 that the company officially announced the switch.

While Arm is largely untouchable in the smartphone and consumer electronics markets, neither is likely to be a significant source of growth in the long run.

Continue reading

Source Fool.com