Doug S (foo.delete@this.bar.bar) on February 27, 2019 11:45 am wrote:
> Paul A. Clayton (paaronclayton.delete@this.gmail.com) on February 27, 2019 10:25 am wrote:
> > If (when?) anyone can trivially assemble ARM design components, ARM will be hurting the profit
> > margins of those licensing its designs. When a MediaTek chip that just assembles ARM design components
> > is nearly as good as a Qualcomm product, it would become difficult to justify extra design effort
> > from Qualcomm and higher prices (to fund such effort and increase profit).
>
>
> What extra design effort? Qualcomm already gave up doing custom cores several years ago, now
> they use standard ARM cores. Maybe they are tweaking them a bit, but if they are it isn't enough
> to show up in benchmarks. So Qualcomm has no room to complain about ARM's licensing making them
> feel the pain of competition, because they are simply licensing cores themselves.
>
> The only Android OEM designing custom cores is Samsung,

I was using "MediaTek" as a name for "company that mainly just assembles prepared components and sends the design to a fab" and "Qualcomm" as a name for "company that designs custom cores and other components". Samsung seemed a less good example because its association with its own fabs.

> Qualcomm's value add is in the integration of everything you need, including cellular and other
> stuff like fingerprint readers. That's where they will have to do better than the rest to keep
> their competitive edge, but when modems from Samsung, Huawei, Mediatek and Intel become "good
> enough", and the other stuff is "good enough" then there isn't much room for them to get a bigger
> profit margin off their SoCs. That won't be ARM's fault though, anymore than ARM is to blame
> for the smartphone market being saturated and replacement cycles lengthening.

If ARM was providing the designs for the modems and "other stuff", then the shrinking profit margin would rightly be attributed to ARM even when the products are produced by other companies. The better and more complete ARM design components and integration become (for a given target) and the easier and cheaper it is to use them, the harder it becomes for others to justify higher prices.

An arms dealer selling mercenary services as well as effective weapons and training would not be that much more an economic threat to a mercenary company than one that selling just weapons and training when anyone can get good recruits. For ARM's licensees, fab technology is not a distinguishing factor ("anyone can get good recruits"). If ARM's design offerings become "good enough" (and complete enough), ARM effectively becomes an indirect competitor.

(Arms dealers and dog food — my mind is strange.)

My post was meant to point out that ARM selling hardware would not be substantially increasing competition compared to providing "turnkey" solutions. Licensees might rightly see their money going to subsidize the competition, but that is true whether ARM sells hardware or not (and it already true to a less extent just in cheaply licensing RTL for cores). It is quite possible that selling hardware would have a greater emotional effect, so selling hardware might push existing licensees to look elsewhere.