ARM Thinks Technology For Poor Countries Can Be Big Business. Here's Why

ARM has had a few very good years. The British company furnishes the processor technology which powers nearly every smartphone in the world -- including the one in your pocket right now.

Now ARM is looking for more applications for its chip technology beyond smartphones, which is why it's sponsoring a competition with the United Nation's Children's Fund which offers $15000 in funding for the best ideas for wearable device applications for the developing world. The winners will get "mentorship" from ARM to make their design into reality. But ARM's partnership with UNICEF isn't charity -- ARM thinks there's potential to make a ton of money selling technology to poorer countries and the NGOs that help them out.

After all, current wearable technology like smartwatches solve "first world problems," like getting too many notifications on your phone. But ARM and UNICEF see potential for technology to solve more pressing concerns like malnutrition, illiteracy and access to capital. The hope is to develop wearable technology that is "not just nice to have, but that people need to have." And if one of these devices sells in the millions, well, ARM will be glad to furnish the chip technology.

Shortly after the announcement, International Business Times was able to sit down with ARM CEO Simon Segars and discuss some of the challenges and opportunites that come with bringing rich world technologies, like smartwatches, to regions sometimes don't even have reliable power.

IBT: What's the total business opportunity for ARM in the developing world? Could it be bigger than ARM's mobile business?

Simon Segars: Mobile is enormous, 1.5 billion smartphones sold last year. Of course in a smart mobile device, there are lots of processors. With wearables, many of them are very simple. I have a Fitbit tracker, and that's got one or two CPUs in there -- not like a smartphone which has 10. So volume of processors wise, [the opportunity is] probably smaller. But the volume of devices could be enormous. You really can get to one or two or three or 10 for every person on the planet.

Wearables can be used in lots of ways, we're used to seeing them here in the US and Europe used as fitness trackers, people who want to be fit. In healthcare, I think there are enormous potential for wearables solving problems you just don't think about around here. Wearables could be tracking air quality or body temperature or other things that are really quite fundamental to quality of life.

IBT: What is ARM trying to do with its partnership with UNICEF?

Segars: There's a great opportunity to leverage all the opportunity that's going on in the developed world to improve the quality of life for people who haven't grown up with the benefits that we have. That's number one. But at the same time, with the changes in population demographics around the world, there's a business opportunity there. So as part of this project, we can try to understand the opportunity a bit better.

People make charitable donations, we have a charitable donation budget, we do that. But if we can crack what's the business opportunity with providing technology to what is a growing population, then that's hopefully going to create a lot more self-sustainability and create some long-term good.

IBT: Is there a bigger opportunity to roll out the Internet of Things in the developing world because a lot of the infastructure isn't there yet?

Segars: As technology is rolled out in developing countries, I think a lot of things are going to be connected. It isn't there yet. When you put in the first [connected device] there's an opportunity to make that new connection. But it does rely on network infastructure. That's something we take for granted here.

If you look at the penetration rates, 3G [cell service] penetration around the world is not that great. But something around 80 percent of people do have 2G connectivity, it's really quite high. So technology solutions that can use networks really efficiently are gonna have the greatest value in the short-term.

We open up just the ability to do more processing locally on devices. So in an environment where the network bandwidth is very low, doing a lot locally and you only transmit a very small amount of data occasionally is a good place to be.

IBT: Google's modular phone, Project Ara, which uses ARM-based chips, is going through a trial run in Puerto Rico. Why do you think it's being targeted towards the developing world first?

Segars: Project Ara is really interesting. There's a really good reason why it's launching in Puerto Rico first. My sudden reaction, when I first saw Project Ara, this is kinda cool, with the assumption being it was going to target the rich world. What's been interesting as this project's been developed is that there are some really cool benefits that can be applicable to poor countries and not just in Silicon Valley.

I think one of the benefits of modularity is to build a whole product, especially something to the complexity of this [points to smartphone] is a lot of effort. And therefore to make another one that's targeted at a less expensive market, again, make a whole product, is a lot more work. If you've got the modularity you can mix and match much more quickly and you can get more products in the field more quickly.

Take Project Ara -- you can put in a 4G modem if you're here, and you can take that off and put in a 2G modem if its going somewhere else. You don't need to redesign the whole product, you just needed the modem piece of it -- just mix and match and there you go. You can put in a lower-cost screen to help get costs down. With that back plane, it removes the need for a lot of ground-up design to create a product. So it's interesting from that perspective.