Why chip firm Arm has been at the core of Apple's success

The smartphone revolution may be causing havoc for European companies like Nokia, but it is paying dividends for a British company that can trace its lineage back to the home computer revolution of the 1980s. Arm Holdings started life in a converted turkey coop near Cambridge, but has grown into a multibillion-pound business, with 1,700 employees worldwide, and its microchips can be found in most of the world's mobile phones, including the iPhone. Last year almost 4bn chips based on Arm's designs were shipped worldwide and this year at least one of those designs is believed to be nestling in the new iPad, though until someone outside Apple gets their hands on one to take it apart no one knows for sure.

Chief executive Warren East refuses to comment on the iPad, but consumer demand for smartphones means that Arm is getting more and more of its designs into phones. In the last quarter of 2009 the company was averaging 2.4 chips per handset. And it is not just Apple devices: Arm's design is in Qualcomm's Snapdragon processor, the super-fast mobile chip that powers Google's Nexus One and a number of new HTC handsets.