ARM's Dominance: Why 99% of Mobile Chips Use ARM Architecture and Nobody Cares

In your pocket right now is probably a device with an ARM processor. If it's a smartphone, it's definitely an ARM processor. If it's a tablet, it's an ARM processor. If it's a smartwatch, a fitness tracker, a Bluetooth speaker, a wireless earbud, or any other mobile device—ARM processor. By some estimates, ARM processors power over 200 billion devices globally. It's the most successful architecture in the history of computing. And most people have never heard of it.

This invisibility is not a flaw. It's the entire point.

The Birth of RISC

To understand ARM, you have to go back to 1985 and a company called Acorn Computers. Acorn was a British computer manufacturer, and it was being destroyed by American competitors making faster, cheaper machines. The problem was that existing processors, like the Motorola 68000 and the Intel x86, were expensive and power-hungry. Acorn couldn't compete on those terms.

A research team at Acorn, led by engineer Sophie Wilson, made a radical decision. Instead of trying to improve existing processor architectures, they designed a completely new one from scratch. The design was based on a philosophy called RISC—Reduced Instruction Set Computer. Instead of complicated instructions that did multiple things, RISC had simple instructions that did one thing really well.

The resulting processor was fast, cheap, and elegant. It was called the ARM, which originally stood for Acorn RISC Machine.

But Acorn, the computer maker, failed. The IBM PC and its compatriots were just too dominant. Acorn went bankrupt. Yet the processor design was too good to waste.

The Licensing Model That Changed Everything

Here's where ARM's genius emerges. Rather than trying to manufacture processors, ARM licensed the design to other companies. Semiconductor companies could pay ARM a fee and use the architecture to design their own chips.

This is completely different from how Intel or AMD operate. Those companies design chips and manufacture them. They own the entire value chain. ARM doesn't manufacture anything. It doesn't own a factory. It doesn't employ thousands of engineers building assembly lines. ARM designs the architecture and lets everyone else do the rest.

This model seemed crazy. Why would you give away your intellectual property to competitors? Why would you let someone else design chips based on your architecture? But ARM understood something profound: the real money in semiconductors wasn't in being the sole manufacturer. It was in being the standard that everyone built on.

By licensing ARM widely, the company ensured that every major chip manufacturer had an incentive to stay in the ecosystem. Qualcomm licensed ARM. So did Samsung. So did Apple. So did Microsoft. So did every smartphone maker in the world. The ecosystem grew. More companies adopted ARM because everyone else was already using it. The more companies used it, the more valuable it became.

Apple's Chip Revolution

For decades, ARM was powerful but invisible. It powered microcontrollers, embedded systems, and some mobile devices. But mobile phones still used other architectures. The early iPhone used an ARM processor, but it wasn't the focus. iPhone's power came from iOS and apps, not from the processor.

Then, in 2020, Apple made a seismic shift. The company had been using Intel processors in its Macs for 15 years. Now it was switching to its own ARM-based chip, designed in-house, called the M1.

This was significant not because ARM was new, but because Apple had never done this before. Apple had licensed ARM architecture and designed its own chips for iPhone, but it had always relied on Intel for its computers. Now, it was betting that an ARM-based chip could be more powerful and more efficient than anything Intel offered.

The M1 was stunning. It had incredible performance, used barely any power, and was silent because it didn't need aggressive cooling. It was a genuine breakthrough. Apple then released the M2, the M3, and now an entire family of ARM-based processors that dominate the premium laptop market.

The M-series chips forced the rest of the industry to reckon with ARM. Suddenly, companies like Microsoft and Google started building their own ARM-based processors for laptops. The x86 dominance that had lasted since the 1980s was being challenged in the one market where it had seemed unassailable.

The Failed NVIDIA Acquisition

NVIDIA's attempted acquisition of ARM in 2020 for $40 billion revealed something important: everyone understood that ARM was the most valuable intellectual property in semiconductors. You didn't need to own a factory. You didn't need to employ engineers. You just needed to own the standard that everyone built on.

NVIDIA wanted to buy ARM and integrate it into its own ecosystem, accelerating the shift toward NVIDIA-based computing. Regulators, particularly in the UK, blocked the deal. They understood that ARM's value came from being neutral—available to everyone equally. If NVIDIA owned ARM, it would no longer be neutral. Everyone would be forced to negotiate with NVIDIA, and NVIDIA would have a massive competitive advantage.

The failed acquisition actually vindicated ARM's model. The company didn't need to be acquired. It was already the most valuable company in semiconductors on a per-employee basis. ARM had about 6,000 employees and generated billions in revenue. Intel had 100,000 employees and struggled to generate profit. The comparison was stark: ARM's model was vastly more efficient.

The IPO and Going Public Again

ARM was owned by Softbank from 2016 to 2023. Softbank bought the company for about $32 billion, betting that the tech boom would make ARM exponentially more valuable. It did. By 2023, when ARM went public again, it was valued at over $60 billion. Some analysts valued it significantly higher.

The IPO was framed as Softbank finally cashing out, but it actually revealed something more important: ARM's value had grown so much that even Softbank, which had made an extraordinarily bold bet, couldn't capture all the upside. The company belonged on a public market where its value could be properly reflected.

The Invisible Monopoly

Today, ARM is something that economists call a "natural monopoly." It's not because ARM crushed competitors through superior manufacturing or marketing. It's because everyone standardised on ARM. Once that happened, the switching costs became enormous. Qualcomm couldn't suddenly switch to a different architecture. Samsung couldn't. Apple couldn't. The entire industry was locked in.

But it's the kind of monopoly that's actually beneficial. Because ARM licenses freely to anyone who wants to use it, there's no artificial scarcity. There's no Apple tax, no Intel tax, no Microsoft tax. Everyone can design ARM-based chips. The architecture is open. The competition happens at the chip level, not at the architecture level.

Hundreds of billions of dollars of value have been created by companies designing their own ARM-based chips. Qualcomm. Samsung Exynos. Apple's silicon. NVIDIA's Tegra. MediaTek. Each company has designed custom chips based on ARM architecture, and each has generated enormous value. The pie expanded rather than being redistributed.

The Future of Computing

ARM's dominance will only grow. As computing becomes more distributed and more power-efficient, ARM's advantages become more pronounced. The cloud is moving to ARM-based processors. Servers increasingly run ARM. Supercomputers are being built with ARM.

In 2010, if you'd predicted that ARM would power a third of all computing by 2030, most technologists would have laughed. Yet that's where we're heading. The prophecy is already coming true.

The beautiful thing about ARM's story is that it shows you don't need to own factories to own the future. You don't need to employ tens of thousands. You don't need to be vertically integrated. You just need to own the standard that everyone builds on.

ARM is proof that in technology, the invisible infrastructure is often more valuable than the visible product. Nobody chooses a phone because it has an ARM processor. But every phone has one, because ARM won by being good, by being open, and by letting everyone else build on top of it.

In the end, the biggest advantage is the one people never think about at all.