MIPS Technologies (Nasdaq: MIPS) flubbed its third quarter, sending the stock back to prices not seen since last September. The chip-technology licensor saw non-GAAP earnings rise 21% year-over-year on 15% higher sales, which missed analyst consensus on both the bottom line and top line.

The company also missed its own sales goals of at least $21 million, and the $0.09 non-GAAP earnings result was the lower limit of management guidance. Looking forward, MIPS guided the fourth quarter below Street expectations on both the top and bottom lines.

MIPS has hundreds of customers, but none as large and important as Broadcom (Nasdaq: BRCM) -- and that company just went bleak as well. MIPS-based tablet computers and smartphones will come around, chiefly running Google's (Nasdaq: GOOG) Android software, but design cycles are long and MIPS is only now seeing royalty revenues from contracts signed as much as three years ago.

As CEO Sandeep Vij reminded analysts on the earnings call, MIPS is in the mobile race, but "It's a marathon, not a sprint." ARM Holdings (Nasdaq: ARMH) seems to have a headlock on the market so far, but it's too early to count MIPS out.

With a trailing P/E ratio just north of 18, MIPS can be an affordable way to add exposure to the mobile computing market. The small-cap stock certainly has more headroom than ARM, which quintupled in price over the last two years and trades at nearly 100 times trailing earnings.

The best way to stay on top of the mobile race is to track the challenges and small victories along the way, which means keeping your finger on the pulse of both MIPS and ARM. The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up-to-date news on companies like MIPS or any of its competitors. To get up-to-date MIPS news and analysis, add the company to your Watchlist today.

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