They did also used to actually make ARM processors. Originally they acquired StrongARM from Digital, and then went on to replace the brand with their own XScale, and found some pretty good success in embedded systems and were at one point near-universal in PDAs and high-end mobiles (a huge customer at the time was RIM who put them in all of their Blackberries at one point). They sold that off though and it fell behind, but they actually still hold DEC's ARM license.
So they did have some prior experience in that space, but that experience was built on the shoulders of what Digital was doing.