mas (a.delete@this.b.com) on September 29, 2013 8:11 am wrote:
> Yeah all that is possible if you think dominant Intel PCs and Servers will disappear within a couple
> of years and Intel Atom volume does not increase overall Intel mpu volume to make up for the loss of
> the greater profit per die of Core. Possible but not very likely, don't forget Intel already has 10nm Trigate sorted with TFET technology planned at 7-5nm. Contrary
> to what you are asserting mobile customers now do have more choice, a non-ARM choice or is an ARM only
> monopoly alright ;-). There is nothing to stop any consumer buying ARM or AMD chips if they feel so
> outraged but I suspect they will go for the best chip for their needs as they always have done.


Intel's market for PC and server CPUs doesn't need to disappear to make your pricing scenario a problem, the market for PC/server CPUs only needs to continue to decline as it has been for three years now. Shareholders will become very nervous about Intel reporting 'success' in the mobile market if what they see in earnings are big increases in unit sales but reduced profitability due to the declines in the cash cows and lack of contribution to the immense fab costs from the mobile SoCs.

This year PC sales haven't declined quite as much as expected, but that's because the average price per PC and laptop sold declined a lot more than expected. As the average price per PC drops that pushes down the demand for Intel's more profitable segment and increases the demand for the lower end less profitable SKUs.

What's worse is the reason why the price points keep falling. People don't need the higher levels of performance and aren't buying at the higher end because of it. That means some of that lower end stuff is amenable to replacement by those mobile SoCs you suggest Intel can sell at prices calculated without paying any of the fab or design costs. Maybe Intel will be able to artificially segment the market by crippling the SoCs in some way that makes them unsuitable to run Windows in a laptop or desktop, or even by contractually banning them from ending up in laptops or desktops, but doing so merely opens that market to AMD. AMD can't beat Intel on the high end, but they seem to be doing a much better job matching them on the low end, and they're don't have shareholders used to making fat profits :) Either way Intel loses a Core CPU sale in the already declining PC market, in exchange for either nothing or an Atom sale that doesn't help pay for the fab.

I don't see how Intel doesn't report declining profits if they price according to your scenario, thus I don't believe that they'll price as low you seem to believe they will. So far the declining PC market has been mostly invisible in Intel's results, because of large declines in the Unix server market, as Intel-based servers continue eating it from below. There isn't much left to eat, even if they took it all (which they cannot, the continued existence of the mainframe market is proof) that will only mask the decline in PC sales for another year or two at most. That doesn't even take into account the wildcard that maybe ARM servers find a niche or two and start nibbling a bit at the low end of Intel server CPUs.