Can’t compete for performance, because they have too much of it, and can’t compete for price with ARM. Rock and a hard place, really.

LoL I know this is completely off topic
but I had to tell someone!

.I’m attempting to find issues to enhance my website!I guess its ok to use a few of your concepts!!

> I’m afraid we may already be beyond the point where a technological advantage matters in the mobile space. In the 80s and 90s, a number of “superior” chip architectures came out (the “RISC” movement), and many predicted that they would displace the then-already-aging x86 lines. However, the world had already invested in x86 software, and so the incentive for moving to a better-performing system was nullified.

I do wonder what happened to Advanced RISC Machines, the makers of the RISC PC and supposedly doomed competitors to x86…

– Chris

Interestingly enough, doing some benchmarking between Atom and Omap4, graphics should be close to on-par, given that they use the same underlying graphics IP from PowerVR. That leaves the cpu cores for comparison. Granted, in a lot of areas, the Intel architecture will run circles around todays arm cores, but seriously, who needs to compile OpenOffice from source on their cell phone? Leave that to the server farm (where arm is making major inroads into).

The bottom line is that Intel’s competitive position depends in its ability to invest ahead of competitors in next gen fab technology. It can afford to do so because of its dominant position in desktop and server CPUs and the healthy margins that brings.

The problem for Intel is that each new fab generation is more expensive than the last, and doubles the number of transistors they can produce. Together, this more than doubles the number of transistors they have to sell to maintain their margins. History suggests that this has been a long term challenge. Their average selling price has declined over the last decade in order to balance the supply/demand equation.

They’ve been clever about maximizing their ROI. They use lower margin CPUs to keep the latest generation fabs full, underwriting the cost of fabbing their higher-margin server CPUs. They maximizing the productive life of their older fabs by using them to build support chips (this is why Intel made incursions with x86 chipset makers in the mid-2000s). Unfortunately, this model has its own limits. One of the ways they’ve been managing to schlep transistors is by integrating more and more features directly onto the CPU die, but by doing so, they undermine their own support chip business, cutting in to opportunities to continue to extract revenue from their older fabs.

Which brings us to mobile. Mobile devices can drive a lot of volume, but they don’t drive a lot of revenue. Apple’s new A6 SoC is roughly the same size of one of Intel’s low end i3 CPUs, but intel sells the i3 for 5-10x what Apple, or any other mobile vendor, is likely to pay for a cutting edge ARM SoC.

It appears that Intel may finally have achieved the power/performance ratio needed to play in mobile phones, but it will probably be at least another year before they even have a chance of having design wins that pay-off in significant volume. And even if they do, their growth is limited. Samsung is a major player in phones, and they tend to favor their own SoCs. Apple is the other big player, and they have obviously made their own bet. That leaves Qualcomm’s market share for Intel. I expect that will be a tough fight. Qualcomm will integrate the SoC with the baseband, and they have a lot of patents to bring to that fight. And then there are all these ARM licensees. It is crazy looking at the evolution of ARM SoCs going into cheap Chinese Android tablets.

I just don’t see a big opportunity for Intel. They have a narrow window to gain any sort of real foothold, and the territory they can gain is unlikely to be enough to hold back the tide of ARM licensees which will start eating into their server revenue.

Intel is vertically integrated around the design, fabrication and marketing of CPUs and related components. The advantages of that strategy are in decline. For chips, that seems to be giving way to merchant fabs, which can get the best ROI on their fab investment by leaving the design and marketing of chips to other companies, like Apple, who are vertically integrated around their end-user, and for whom designing their own SoC allows them best serve their customers and drive economies of scale.

Secondly, whether they go to ARM or continue with Atom, it will have to be price competitive with ARM.

At this point pushing Atom just so they can extend the x86 monopoly into the mobile space seems like a foolish plan. It’s not going to happen, nobody is going to pay an x86 tax when there are no benefits, only downsides.

I therefore think Intel will get back into ARM manufacturing. Why they don’t team up with Apple to at least make all of Apple’s chips is beyond me – it seems like there is no reason not to. What makes me optimistic is that Intel is at its heart a pragmatic company – they’ve run dual strategies before. I don’t see why they can’t do it again. Maybe they’ll even buy ARM?

and product-optimized chips of whatever type have to be the wave of the future. Apple is doing is first with ARM tech, that’s all. the benefits are huge. in 5 years it will be the norm.

the old days of Intel decides and OEM’s follow are fading fast. the handwriting is on the wall – or the die, in this case.

No doubt, Intel has the culture, people, IP, machinery to make great chips, but also no doubt, the number of full-fledged PC sales have ALREADY peaked, so sales of their high-profit items are capped.

Further, for many of us the CPU speed is almost irrelevant; most of my delays are network or disk issues. I mean most of the delays not caused by waiting for my fingers to hit the next key or my mouse to click on some icon. So the benefit of faster processors is very low for the majority of desktop users; they will increasingly opt for the lower-power devices.

No doubt the server marketplace will continue to grow and be very profitable for Intel, but the other 98% of their potential sales have ALREADY been disrupted by low-cost, low-capability processors—sometimes, lower-cost Intel chips, sometimes ARM.

If Intel wants to transition to current demands, they need to compete against devices that are much lower-priced. They can continue X86-only, or they can switch to ARM. But they’ll never be able to continue the same margins on either architecture.

Your point about the fungibility of chips is well taken—most Android programs run well on either CPU with NO changes, and Apple is the master of multi-CPU transitions—but this also cuts against Intel, as the Windows RT transition shows. (I have VERY modest expectations for that platform near-term, so it hardly matters.)

All in all, Intel will be facing sharp competitive pressures as others continue the race to saturate user needs on mobile devices.