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An employee uses a remote control to demonstrate a Hewlett-Packard Co. Dreamscreen digital photo frame, which contains an ARM microprocessor chip, at the ARM Holdings Plc headquarters in Cambridge, U.K., on Wednesday, March 16, 2011.Bloomberg

ARM Holdings PLC , the British microchip design company, has unveiled an ultra low-power chip that could pave the way for a multitude of devices from washing machines to parking meters to be wirelessly connected into an "Internet of things."

The Cambridge-based company, whose designs dominate the mobile phone sector, said on Tuesday that it had created the world's most efficient microprocessor design. The chip is capable of the same kind of fast processing power as the chips in smartphones, but uses just a third of the power of a very basic, 8-bit microprocessor.

Chips using ARM's "Flycatcher" design would be just 1mm by 1mm in size and be able to run off a small battery for very long periods of time, meaning they could be embedded in products such as blood pressure monitors that could transmit information wirelessly to doctors' surgeries.

The chips might also be able to connect home appliances such as washing machines to a home network, switching them on and off to regulate energy consumption, for example.

Some home appliances today may contain 8-bit or 16-bit processors but these cannot handle very complex functions.

"The Internet of things will change the world as we know it, improving energy efficiency, safety, and convenience," said Tom Halfhill, a senior analyst with The Linley Group. "Ubiquitous network connectivity is useful for almost everything – from adaptive room lighting and online video gaming to smart sensors and motor control. But it requires extremely low-cost, low-power processors that still can deliver good performance."

Ericsson, the telecoms equipment company, recently forecast that there would be about 50 billion connected devices by 2020, rising from about 15 billion today.

ARM said it expected Flycatcher-based chips to sell for around 20 to 30 cents per chip, from which it would gain a 1-2 per cent royalty. Although the percentage is low, the sheer volume of chips potentially coming to the market could make this a valuable revenue stream for ARM.

NXP Semiconductors and Freescale, two semiconductor manufacturers, have already licensed the design.

ARM will face some competition in the ultra low-power market, however. A number of other chip designers, including Microchip Technology and Atmel in the U.S., are also developing low-power, high-performance chips.

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