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Intel Corporation Message Board

  • wallisweaver wallisweaver Jan 1, 2012 10:49 PM Flag

    Sony slashes Tablet S price, signaling trend

    [Yet more evidence of significant downward pricing pressure on non-Apple ARM tablets. ARM has a 2012 to look forward to in which the greatest proportion of their market will move significantly towards the low end of the pricing range. This will force ASPs, margins and profits to decline. The number of tablet sales in 2012 is supposed to move up nicely. But will the number increases be enough to justify a 71 P/E ratio given the downward trend on pricing? And will capacity shortages allow ARM to serve up significantly higher production? We already know that fabrication issues will affect production at the high end. It looks like a year of serious challenges for ARM. With that lofty P/E they can't afford to stumble, much less slow down...]

    [In the meantime, Intel looks to expand into the high end of the tablet market, in addition to entry into the smart phone market. Just more complications for ARM as the competition heats up...]

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    • [Yet more evidence of significant downward pricing pressure on non-Apple ARM tablets. ARM has a 2012 to look forward to in which the greatest proportion of their market will move significantly towards the low end of the pricing range. This will force ASPs, margins and profits to decline. The number of tablet sales in 2012 is supposed to move up nicely. But will the number increases be enough to justify a 71 P/E ratio given the downward trend on pricing? And will capacity shortages allow ARM to serve up significantly higher production? We already know that fabrication issues will affect production at the high end. It looks like a year of serious challenges for ARM. With that lofty P/E they can't afford to stumble, much less slow down...]
      -----

      Perhaps the ARM board could answer some of your questions?

    • ARM reveues are from licensing and royalties and ... companies who build ARM-based products. The retail pricing of tablets affects licensing and royalty and ..... revenues of ARM ?

      How does the price of a tablet affect ARM revenues?

      • 3 Replies to alexander.dumbass
      • ARM reveues are from licensing and royalties and ... companies who build ARM-based products. The retail pricing of tablets affects licensing and royalty and ..... revenues of ARM ?

        How does the price of a tablet affect ARM revenues?
        -----

        ARM typically earns between 1 and 2% royalty on the selling price of the SoC that contains the ARM core, not the selling price of the device.

        In terms of tablets you would been to look at the BOM (bill of materials) to see if there is any impact on ARM. Typically, the flash memory and screen are higher cost items than the application processor. You also have to take into account other chips in the tablet as these often have more ARM cores (baseband, wifi etc).

        Finally ARM shipped some 2 billion cpu's last quarter, so tablets are only a small chunk of it's royalty revenue....

      • And ARM can't just continue at the same level. Revenues have to scream upward to justify that 71 P/E ratio.

        With margins shrinking are ARM shops going to want or even be able to pay more?

        It's been suggested by more than a few that RIMMs tablet is actually going to put them out of business. This is obviously the worst case scenario when ASPs shrink. How much licensing revenue do you think ARM will get out of RIMM in 2012? Maybe zero?

        Or HP? You don't think either of those affected ARM's revenues?

      • "How does the price of a tablet affect ARM revenues?"

        ***

        If ASPs didn't affect ARM revenues then they could obviously charge anything they wanted. We know this isn't the case.

        If manufacturers can't make money they will cut back production. Cut backs in production will reduce ARM licensing fees.

        It's a food chain. If no one consumes at the bottom then no one will make any money at the top...

    • "Sony has knocked $100 off the price of its S series tablet, another sign that non-Apple tablet pricing is trending downward. The 16GB Tablet S is now $400, reduced from $500, while the 32GB model got cut to $500 from $600.

      Specs include a 9.4-inch 1280x800 display, front and rear cameras, Android Honeycomb, 1GB system memory, and eight hours of rated battery life."

      http://news.cnet.com/8301-13924_3-57350761-64/sony-slashes-tablet-s-price-signaling-trend/

 
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