Smart homes are becoming an idea that is more welcome in the tech world, ARM Holdings CEO Simon Segars told CNBC. "We're seeing the intelligence that is enabled by embedded processing really starting to come to the fore and I think it's going to be a really exciting year in 2015 as these ideas develop," he said Friday on "Squawk Alley."
Also, wearable devices will continue to be popular and see lots of innovation, Segars said.
"I think we're seeing a very broad theme developing into more concentrated ideas around smart homes, smart cities, connected cars," he added. "We're starting to work out how the interconnectedness of these devices can help provide some benefits, whether it's a better user experience or it's improved energy efficiency in your home."
Segars said ARM is concentrating on product development and collaborating with its partners in response to competition.
"We are really focused on innovation. And we are really focused on what we do and how we work with our partners to create the best product we possibly can at the end of the day."