Shares in ARM Holdings were down on the FTSE 100 in afternoon trading as the British manufacturer of microchips was hit by news of poorer than expected sales of the iPad by US technology giant Apple.

Apple said that it had sold 4.19 million iPads in its fourth quarter, significantly below the five million expected by analysts.

It is believed that ARM microchips are used in the manufacture of the iPad and there has also been talk of Apple being interested in a takeover bid of the Cambridge based company.

By 16:40 shares in ARM Holdings were down 2.53 per cent on the FTSE 100 to 389.00 pence per share.