Everyone's been talking about the "Internet of Things," including ARM Holdings (NASDAQ:ARMH). The British chip designer is hosting a conference call on Wednesday just to discuss its opportunities in this next big trend. ARM also acquired Sensinode a couple months ago, a small start-up focused on making software for the Internet of Things. After establishing a dominant position powering the mobile revolution, turning to the next evolution makes sense for ARM as most companies expect to be influenced by the Internet of Things within three years.

ARM's microcontroller business will target the Internet of Things, and ARM inked 18 new Cortex-M licenses last quarter. That brings its total cumulative Cortex-M licenses to 196. ARM's microcontroller partners are expected to ship 23 billion units annually by 2017, although these will generally be lower-priced units compared to applications processors. Intel is targeting the Internet of Things with its newly announced Quark chip, a tiny processor that can fit in a wide range of connected devices. Unlike in mobile, Intel is acting fast and has a shot this time around.

In this segment of Tech Teardown, Erin Kennedy discusses the coming Internet of Things with Evan Niu, CFA, our tech and telecom bureau chief.

Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.