Arm surges on Microsoft partnership

ARM Holdings was the stand out winner at the Consumer Electronics Show yesterday, after Microsoft announced its processors would be used in a new, low-powered version of the Windows operating system.

Microsoft signalled it will work with UK-based ARM on the next version of its platform in a bid to gain traction in the next generation of mobile devices.

ARM has already raced ahead of established rival Intel to corner the market in low power-usage chips for devices such as tablet computers and smartphones, but has been unable to break into the laptop and desktop markets so far.

The tie-in will enable Microsoft to offer a full range of devices including tablet PCs, boosting the appeal of its mobile operating system, which chief executive Steve Ballmer stressed is key to the firm’s growth plans.

ARM’s shares gained 2.25 per cent to close at 482p, having added 7.7 per cent on Wednesday in anticipation of the announcment. The shares were also propped up by talk that Intel was considering mounting a takeover attempt, although analysts thought this unlikely.

•Separately, Microsoft announced it has smashed forecasts for sales of its interactive Xbox accessory Kinect. Ballmer’s firm had expected to shift 5m units over the Christmas period but instead sold 8m.

Much of his speech in Las Vegas yesterday was dedicated to announcing new ways users would be able to interact with the Xbox and other Windows software using the platform.

He demonstrated an advanced “avatar”, a computer generated character that is able to recognise facial expressions.