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  • ltisteve Aug 12, 2011 4:57 PM Flag

    Intel hasn't entered the market yet!

    The story, over and over again with ARM processors is that they are high volume AND low margin. There is a lot of excitement around them, a lot of sales, a lot expectations, and time and time again disappointing profits. Qualcom is complaining about a downturn in sales, Motorola's new mobile division has gotten it's board nervous about the future and NVidea was supposed to hit a home run today with earnings only to walk to first base.
    I did love how some of the analysts were predicting that NVidea would pick up more discrete graphics card business in laptops. It's like they never heard of Sandy Bridge and Llano.

    The problem with the ARM processors is that there isn't one large competitor who control the majority of the market. There are a few fairly good sized competitors who are battle scared from clashing with each other. I don't know exactly how Intel will approach this new market, but I sense that they will cherry pick some of the more profitable segments, trade on their name, advertise like crazy to build awareness and leave the low profit generic aspects to ARM where Motorola, NVidea, Qualcom, and TI will fight each other for market share.

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    • ARM CPU business is low margin business. Only ARMH and TSM(or other foundries) made money with the large volume because they always charge regardless what price the CPUs are sold. ARMH charges for the license fee, TSM charges for the manufacturing. NVDA sold a lot, but considering all the R&D cost, license and manufeacutre cost. It probably only barely break even. QCOM/TI are in the business longer than NVDA. They also have more experience in phone/mobile device integration. Samsung also has its own version ARM chip. It can leverage its own manufacture facility. Interestingly some Samsung \devices also use Tegra2 chip instead of its owns. This means NVDA must be selling the Tegra2 at very low price.

      The stupid analysts just keep hyping the ARM chip. This is good some cases. At least it gives INTEL warning. Intel Ultrabook push is good. This will help Ultrabook gaining market share back from some of the tablets.

      • 1 Reply to lingchen
      • ltisteve Aug 12, 2011 8:11 PM Flag

        Yes, great points! TSMC and ARMH are making a boatload of bucks on ARM, while QCOM , NVidia, MOT, and TI are beating the hell out of each other for market share, selling in large volumes and not making the money they thought they would.

        Your right, analysts see the volume, but at $25 a CPU, there isn't much much profit. Not as much as they expect to see.

        Intel knows how to make money at each level, and how to cherry pick the market. But analysts don't get it.

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