ARM Holdings reported a loss in the fourth quarter of 2013, and it said sales of chips for "high-end smartphones" have slowed down.

But that doesn't mean the losses will continue. Sales growth of entry-level smartphone chips increased, as did sales growth for microcontrollers and smart sensors. Additionally, ARM says its nascent presence in the server market is bound to grow.

ARM's revenue improved from £164.2 million to £189.1 million year-over-year, but a one-time charge of £59.5 million combined with its usual expenses was enough to give the company a quarterly loss of £6.2 million compared to a profit of £42.5 million in Q4 2012. The loss of £6.2 million is equivalent to $10.1 million.

The one-time charge relates to ARM's involvement in a company called Bridge Crossing (BC), which was formed by a consortium of tech firms to acquire rights to MIPS Technologies patents.

"In Q4 2013, BC made a strategic decision not to pursue a licensing program," ARM wrote in today's earnings announcement. "As ARM believes that there is significant longterm strategic advantage in owning this intellectual property, the Patents were purchased outright in Q1 2014 for $4m (£2.5m). The patents acquired (approximately 500, granted and pending) are now part of ARM’s portfolio of more than 3,500 patents. As ARM now owns the Patents, there is no future cash to be received from BC, so the available‐for‐sale financial asset has been impaired, giving rise to a non‐cash exceptional charge of £59.5 million."

Even though that charge accounts for the quarterly loss, ARM's business is still going through some growing pains.

“ARM is heading into a period of slowing royalty growth due to the ongoing slowdown in the smartphone and tablet markets, particularly at the high end,” Janardan Menon, a technology analyst at Liberum Capital, said in a research note quoted by the New York Times.

For the quarter, licensees of ARM technology shipped 2.9 billion chips, "up 16 percent year-on-year with faster growth in low-cost chips in entry-level mobile devices, microcontrollers, and smart sensors," ARM said.

ARM said its full-year "processor royalty revenue grew faster than the overall semiconductor industry by 18 percentage points," but that "the degree of outperformance was impacted by slower sales of chips for high-end smartphones in the second half of the year."

Despite what ARM called "slower growth in one end market," the company said it believes processor royalty revenue in 2014 will "grow at a similar rate to that reported over the last three years." That's because other chip markets are expected to increase.

"After a strong licensing performance in 2013 which saw ARM make good progress across its established markets as well as making significant in-roads in servers and smart embedded applications, we enter 2014 with a strong opening order backlog and a healthy pipeline of licensing opportunities," ARM said.

ARM noted that during the quarter AMD "announced the imminent sampling of its low‐power server SOCs, based on Cortex‐A57." Separately, ARM said that "momentum continues in computing, servers, and networking applications with the signing of an ARMv8 architecture license and two ARMv8 processor licenses."

While the ARM server market took a blow when startup Calxeda shut down, ARM last week announced a definition of a standard platform for ARM-based servers to boost momentum.

In the quarter, ARM signed processor licenses of all types with 22 companies, more than half of which were first-time customers. "Many of these new customers are planning to use ARM technology in emerging applications such as healthcare, Internet of Things, and wearable digital devices," the company said.

"ARM's strategy is for our technology to continue to gain in long-term growth markets, such as smartphones, tablets, enterprise equipment, and embedded computing, and to increase the royalty percentage ARM receives from each device," CEO Simon Segars said.