RichardC (tich.delete@this.pobox.com) on September 30, 2013 7:19 am wrote:
> anon (anon.delete@this.anon.com) on September 30, 2013 7:04 am wrote:
> > It is easy to imagine it, and everybody claims that this is how Intel will fail, but what
> > would be impressive is actually narrowing down what would happen and giving some numbers.
> >
> > Lots of people were predicting the doom of Intel from ARM since the iPhone (earlier
> > for some, but iPhone brought ARM to the minds of the masses). Their margins are still
> > up near 60% and we've been waiting a long time for them to plummet like a rock.
>
> I don't think anyone's expecting them to "plummet like a rock". They own the desktop/
> laptop market, but that seems to be shrinking. They don't have noticeable share in
> tablets/smartphones

This has been the mantra for 5 years or more. Yet they are near all-time high revenues, with margin that is expected to be up, to 59% this year (which seems to wander between about 50-60% over the years).

> - but to some extent Intel benefits from the growth of that market
> because for each new web-enabled device, somebody buys some fraction of a web-server
> cpu somewhere, and those so far are dominated by Intel, and even higher margin than the
> desktop/laptop parts. The real crunch for Intel would come if/when they fail to
> establish a high-profit phone/tablet business (the Surface Pro isn't doing it for them
> so far ...), *and* ARM-based server products start eroding their volume or margin
> in the server business.
>
> I believe they're feeling the pinch already - didn't they recently scale back their
> fab investment plans ? But the question is where they'll be in 4 or 5 years. And if
> I really knew the answer to that I'd be getting rich ...

That's exactly what people said 4-5 years ago (although many of them were even more eager and were talking more like 2-3 years before Intel imploded).

I'm no particular Intel fanboy, but I think the death of the PC is greatly exaggerated -- tablets, smartphones, and longer obsolescence cycles may shrink the market, but won't kill it -- and I also think that there are many ways for Intel to respond to change when it does happen.

Sure things are going to change, but not many people have a really good idea of how why and when. Repeating the same old "wait a few years and ARM will erode Intel and destroy its model" isn't anything new. Who's to say that Intel won't come up with ARM or even x86 silicon that is highly integrated and better performing than competitors for smartphones, and with their manufacturing a node or two ahead of anyone else, they can take market share *and* get higher margins than other designers and foundries? The naysayer's narrative seems predicated on Intel staying the same, and other designers and foundries changing and entering new markets.