ARM on Apple rumors: Independence works for us

ARM on tech takeover talk

The chief executive of ARM, the U.K.-based chipmaker which saw a spike in its share price this year around Apple takeover rumors, has told CNBC that remaining independent is the "right thing" for his company.

ARM on Wednesday reported second-quarter profits of £124m ($193m), up 31 percent from the same time in 2014, but slightly below market expectations of £126 million. Its diluted earnings per share for the quarter were 5.42p per share, up from 3.91p a year ago.

A Chinese man sets up his new iPhone 6 inside an Apple store in Beijing, China.
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The technology sector in general – and Apple suppliers in particular – have been buffeted by weaker-than-expected results from the Cupertino-based tech giant Tuesday. Arm's share price fell 3.75 percent when the market opened Wednesday morning.

The Cambridge, U.K., based company is a key supplier for Apple products including the iPhone 6, which has led to market rumors that it might be bought out.

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Segars told CNBC: "There are rumors all the time about us being acquired. But when you look at our business model… for any one company it's much less expensive for them to license our technology than to buy the whole company."

"Our value really is in the fact we are an independent company supporting an entire industry and building an ecosystem that means that support becomes very cost-effective. We strongly believe our business model is a great thing for the industry…and that an independent company is the right thing for Arm."

"If ever there is something to say to the market, we will," he added.

The future of smartphones, according to ARM

The company's share price has also been affected by concerns about continuing volume growth in the smartphone market this year.

Segars said: "We've been thinking about the evolution of smartphones ever since the company really got started.

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"We're seeing our technology adopted at multiple price points and a trend for more sophistication in phones. It's amazing what you do and take for granted about the capability of smartphones today. As we look to the future, we're thinking about higher rates of connectivity, 4K video content, more sensors which are interacting with your environment. We believe you're going to be doing more with your phone."

- By CNBC's Catherine Boyle