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  • ltisteve@verizon.net ltisteve • Nov 13, 2011 10:11 PM Flag

    Why smart phones are important

    I enjoy reading the post from engineers on this board. Intelligence is important, but a linear view of the world does have its drawbacks. They can't wait until the Intel Atom processors for phones come out so that they can prove once and for all that there is a superior ARM processor already available in the market, or just about to come out. ARM wins, case close, Intel fails.

    Had this been true Intel would have been out of business years ago. Intel has a long history of not having the best processors in the market from time to time. If this logic is indeed correct AMD would be going like gangbusters and Intel would be laying off right now.

    Intel uses this phrase, so you ARM fan boys please write this down. "Best in class". When it comes to processors for phones this is something to remember. They simply want the user to have a good experience. Sure there are going to be people who want the fastest processor at any given moment and perhaps it may be ARM. For the rest of the world, a good experience is important with a phone, more than speed. Honda Civics aren't the fastest cars for the money, but they certainly sell a lot of them.

    When it comes to competition Intel does things at times which may look counter productive. Was it really a good idea to put a GPU under the die of the processor in Sandy Bridge? In some ways it makes the layouts of the boards less complex, but in reality it was a move to deprive Nvidia and ATI/AMD of funding. Expect to see more computer builds without discrete graphics cards in the future, not such welcome news to an already dying market.

    Yes, in the big pictures cell phone processors don't really matter. Perhaps Intel really does care less about them, or do they?

    If you have a business degree like I do you get your obligatory accounting courses. One of the more interesting topics other than the hot blond who sat in front of me all semester was the term "fixed costs." When you open a fab there are a lot of fixed costs, the machinery, the land, the building. Staff and materials are variable costs, we'll just focus on fixed costs.

    If Intel takes on lets say 10 billion dollars in debt to open the fabs and they sell exactly on processor at $200, well it does very little to clear up that debt. But when you are pumping through 90K wafers a month each little processor gets to take a few more pennies off the fixed cost liability. A less fancy way of saying it is "each processor sold helps pay for the factory."

    The ramp up in the fabs, or the doubling of output by 2016, however you like to phrase it is un-freaking believably expensive. Not many companies can afford to pull it off. As Intel uses the the phone processors to not only pay off the building, but to help increase the margins of the more expensive processors by diluting the fixed costs. Oh, I'm sorry, ARM fans get annoyed when I mention HUGE PROFITS in front of them. Sorry, I'm not an engineer, I'm an investor, I like the sound of HUGE PROFITS.

    Speaking of ARM, Intel is trying to deplete ARM's financial resources. Each ARM fab needs 100 million 28nm processors to sell before they hit break even. Yikes! The journey into 28nm will happen for ARM. But, they will be there for a while. The road to profits is going to be longer. Yes it would help if we had a rip roaring world economy and hopefully that will happen.

    What is interesting is that each move is designed to set keep ARM from taking over like we've all heard so much about. Yes, this is not a zero sum game, but keeping competition at bay is something Intel has a lot of expertise with.

    So, when I see someone point out ARM has the fastest processors and they will take over, I kinda get a smile.

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