At least in theory they still have a huge pile of money, but that doesnt last forever.

ARM / PowerVR – with the heavy competition between their ‘customers’ – are commodotizing the CPU market. Not only for phones like in the past, but already for tablets. And soon for laptops and desktops (I remember your great NuFront vid, I suspect Microsoft is partnering with NuFront to bring cheap NuFront/Win8 desktops), and servers (I remember your Armada-vid!).

What can Apple do:
-Become a niche player in the high-margin market, only serving the richer part of the world; let Android take the lead in market share,
-Enter the low-margin market, earn less but try to sell more devices.

The same is true for Intel:
-They can remain a niche player in the high-margin high-performance x86 market,
-They can try to do both, half-half, like iCore for high margin / performance market and without really wanting it and trying for 100%, still sell some Atoms, even though they are cannibalizing iCore earnings,
-Enter hte low-margin market as well, earn less but try to sell more chips.

No matter what Apple / Intel do, their margins will suffer anyway. If they continue to be ‘high-end only’, they will only serve a niche market. Chips with ARM-technology are sold a few billion per year. But because cheaper devices are becoming more competitive, they’ll earn less.

If they enter the low cost / low margin market, they’ll cannibalize their own high-performance products (unless customers really need the high performance) and unless they can ship big volumes, their earnings will drop as well.

I’m not sure if you’re familiar with BoomBustBlog.com, over there Reggie Middleton has many stories about how Android commoditizing the smartphone market causes “margin compression” for Apple, and that’s why he’s shorting Apple shares now. I think any wise person would do the same for Intel. Unless they’re really able to ‘buy their way into the mobile market’. Microsoft tried to buy their way in, but until today, failed. So spending billions is no guarantee at all.

So, what does it mean for Intel:
-Their profits will drop anyway,
-If they license ARM instruction set (ARMv7), they will need very much time to reach the same level as TI, Qualcomm, Marvell etc.
-If they buy PowerVR / Cortex A9 design licenses and ‘glue together’ while adding more ‘existing blocks’, they could reach the same level as Apple I suggest. Which means bringing the ‘quickest’ ARM-/PowerVR processors to market as the first company. That would cannibalize their x86 earnings I think, because that would mean their ARM processors will be better than Atom. And already today, some people are not buying high-margin iCore processors because Atom is good enough for them. So if “Intel on ARM” is even better, they have a problem.
-If they continue x86, they’ll loose about the entire mobile market.

I see only one alternative for Intel, and that’s buying a company which already has great ARM SoC’s, and maybe ‘moving Atom to ARM’ using existing technologies. I think they’re showing that’s the way they want to go, after they bought Infineon Wireless. But whatever they do, their profits will take a beating anyway. Not only do they suffer competition from many ‘co-operating competitors’ (co-operating in Linaro), but the same is true for the foundries: Lots of competitors are co-operating in GlobalFoundries, and I think GlobalFoundries is on par with / even ahead of Intel.

As a result, in the near future for new markets, both Microsoft, Apple and Intel will be ‘just another player’ instead of monopolists (Apple only was a monopolist in the tablet market I think). Unless they succesfully lock in their customers, which goes for the x86/Windows/corporate combination.

Dell Duo, HP Slate, Gigabyte released a whole bunch of Convertible tablets using ATOM, among many others that people have actually bought. So yes, people do buy ATOM tablets.

AMD is also starting to get into the tablet market as well with their Ontario side of AMD Fusion line.

Really, until Windows 8 comes out a x86 solution is the only way to run Windows and most readily available operating systems that haven’t been optimized for running on ARM.

On a phone though, Intel is trying but I agree that it’s unlikely they will make much headway there. Though XP phones have been made before and I’m sure at least some people got it, just not mainstream.

["They cost 4x as much and feel 40x slower. "]

Actually, just to show proper perspective, ATOM processors have to date offered better performance than any ARM offering and pricing for the performance and capabilities is actually less when you factor everything that is actually offered. Take the Motorola Xoom for example vs the HP Slate.

While the cheaper ARM tablets also offer less. So despite the ARM cost advantage the final systems price can still be pricey.

Though the next gen ARM offerings coming out later this year and next will finally change that difference. ARM tablets up till now just seem faster because they aren’t running as much but if you put the same OS on both a ARM tablet and a x86 tablet, it will run faster on the x86 tablet.

iOS and Android are just very basic OS that can run fast on low performing hardware. While Windows or even Linux require more to run without seeming slow and sluggish. Though of course iOS and Android are much better suited for a tablet interface but I’m clarifying how the systems performances actually compare.

It’s just a question of whether Intel can advance the ATOM line fast enough to keep up once ARM finally does rival their present ATOM offerings. But Intel is coming out with a Cedar Trail update to their ATOM line that promises to double performance, reduce power requirement to the point they can go fan-less, and reduce cost per chip to nearly half what they presently are for the Pine Trail line.

So we shall see starting next year how far ARM can spread, but for now ARM leads the mobile market and dominates most of the tablet market. But don’t count Intel out yet in the tablet and mini-notebook markets.

The upcoming Cedar Trail was recently announced to be lower cost than previous Atom offerings at about $45 for example. While even Oak Trail is still priced about $75 for comparison. Showing they are starting to make progress and it’s just a question of whether it’s too little too late or just in time…

While even if Intel buys into the ARM architecture themselves doesn’t mean they won’t convert it into something that will give them an edge. Or make a hybrid offering. So it remains an unknown how they will use this acquisition…

Though for the more immediate future I agree that ARM will be making significant advancement into new markets. Especially now that they can finally provide the threshold of performance needed for more significant applications than they have previously been applied towards.

I just don’t see them taking over the laptop market unless Intel messes up… Even netbooks don’t dominate the whole laptop market despite three years of rapid growth.

There is a difference from being popular and actually being dominant in the market. So we have to temper our enthusiasm for these new products with traditional practicality to properly analyze how they will influence the market in the long term…

- Intel is still in a good position since Windows only runs on x86 at the moment.
- Intel chips are costly compared to ARM SoC’s. It needs to lower prices.
- It is not going to switch to ARM way, in fact it sold its Xscale bussiness to Marvell.

They should consider either of two options:

- Develop reduced intruction x86 processors to ensure simple processor: Anyway the marriage with Microsoft is gone and most people dont use Windows on mobile devices, why support it ?
- Evaluate MIPS: Intel is a processor expert, if it can confirm the rumors of MIPS superiority over ARM it can use its muscle come up with a MIPS processor that surely can be dominant in the market.

Anyway the news of Anand Chandrasekher leaving Intel shows that they do not have a plan on how to embrace the new market changes.

For example the Celeron M 353 at 900MHz performed about as well as an Intel N270 at 1.6GHz. The Intel GMA is similarly placed, being more power efficient than performance orientated.

But the Atom has been more or less stagnant since its release. The Pine Trail update mainly just improved power efficiency and didn’t really improve performance. Only now that competition is finally out is Intel seriously considering improving their low end processor lineup with more than marginal performance improvements.

So it’s possible they fired Anand Chandrasekher because he didn’t capitalize on Intel’s original lead and try to spread into the mobile market much earlier. Similar maybe to how AMD recently did the same to their CEO Dirk Meyer for reportedly the same unofficial reason.

Though x86 still dominates the majority of the computer market and it’s just the low end and particularly the mobile market that alternatives like ARM are dominating. We should keep in mind that people, on average, only do about 19% of what they need to do with a computer on the go. So traditional systems aren’t going anywhere.

We should also not confuse a rapidly growing market with a dominating market. Mobile devices may get bought more often but this really hasn’t effected the purchases of regular computers. Computers just need to be replaced less often. Though mobile devices are starting to cover more uses and that is increasing their market share but it’ll be a long time before they really threaten the rest of the market.

While many mobile devices are trying to get into the overlap between mobile and portable systems, with examples like the Motorola Atrix with its laptop dock and other convergence devices. So while Intel may not stand much of a chance in the fully mobile market, but in the gray area between mobile and portable they do have an opportunity to make some headway before ARM cements its presence in that area of the market.

MS move to make Windows compatible with ARM though does pose a issue for Intel as it’s one of the main reasons why people would cling to x86 systems. But it depends on how effective that move will be and whether even the latest high powered ARM processors can run the OS fast enough to satisfy the average user.

ARM has rapidly improved over the last few years but they are only now starting to reach the performance level of even a ATOM processor. Though graphically they are ahead thanks to Intel’s low performing GMA offerings and ARM can be manufactured more cheaply and designed more power efficient.

This all makes which has a clear advantage to vary depending on what you want the system to do. So we’re still at the wait and see stage before we can be sure how this will turn out…

1) Absolutely fabulous (pun intended) and stunning fabs
2) The processor design team
3) x86 architecture

The biggest lacuna

1) Superiority complex
2) GRAPHICS, GRAPHICS, GRAPHICS

Let Intel decide on her own.