Richard Cownie (tich.delete@this.pobox.com) on January 29, 2013 4:42 am wrote:
> Very interesting analysis, thanks.
>
> I think the argument about area and cost - and Intel's processing advantage -
> is all correct. What may be missing is the impact of the different business
> strategies: Intel really wants to sell those server cpus at very high margins -
> say 300mm2 of silicon for $1500. But it's going to be facing a lot of competitors
> from the ARM/cellphone world, e.g. Qualcomm, who would be very happy to sell
> 10M server cpu's at dramatically lower margins. Intel's technical advantages
> alone won't allow them to preserve their high margins on server products (just
> as the advantages of RISC servers couldn't protect them against Intel's high-volume
> good-enough-and-much-cheaper P6). The future may still be predominantly x86 -
> but the business will look very different.

Selling server chips with extremely low margins
sounds dangerous. Qualcomm needs to be able to
survive bad times. And the more Qualcomm nibbles
at Intels high-margin business (which also
exist to protect itself in exactly these bad
times), the higher they have to aim for higher
margins as they take over Intel's risks. (Which
loopsided means that Intel would die faster,
because they have to sell for higher prices.)

Qualcomm may very well want you to sell servers
at lower margins, but in the end they have to do
the same as Intel.

Which leaves to question if you want to pay
Qualcomm for a few cheap and worse chips now just
to pay as much tomorrow again, but without Intel's
time advantage through R&D.

Which brings the question really down to questions
besides money. Why go with Qualcomm? What is so
much better?