Embedded computer vision involves the use of digital processing and algorithms to interpret meaning from images or video - allowing devices to understand their environment through visual means.

Cambridge-based ARM said the acquisition of Apical would accelerate its growth into new markets such as connected vehicles, robotics, security systems as well as industrial and retail applications.

It said it would also extend ARM's product portfolio in existing markets such as smartphones and cameras.

"Computer vision is in the early stages of development and the world of devices powered by this exciting technology can only grow from here," said ARM Chief Executive Simon Segars.

ARM said Apical's imaging products are used in more than 1.5 billion smartphones and approximately 300 million other consumer and industrial devices.

Founded in 2002, Apical employs about 100 people, mainly at a research and development centre in Loughborough, central England.

Last month, ARM reported better-than-expected first quarter profit.

Its shares have, however, fallen 11 percent this year on reports Apple has continued to reduce iPhone production.

The stock closed on Tuesday at 928 pence, valuing the business at 13 billion pounds.

(Reporting by James Davey; Editing by Mark Potter)