It's pretty clear that Intel's Tick-Tock methodology will be a pretty big deal in the mobile space. Apple's latest (Samsung-manufactured) processor is using 45nm technology, which has been described as simply "too big." Samsung's attempt to improve is based on a 28nm die, which won't hit shelves until the release of the next-gen iPad in early 2013. Clearly, Intel's ahead of the game—22nm mobile in 2013, 14nm mobile in 2014. This is the advantage of having a ton of fabs and the advantage of size. If competitors can't keep up, they'll be left behind. ARM may have the early lead, but it's the second half that really matters, and that's where Intel's Tick-Tock clock management will enable it to shine.
In conclusion, Intel's current valuation (P/E of around 11) and dividend yield (over 3.4%) combined make it a steal. Trefis believes Intel has a current fair value around $32, and based on even conservative growth estimates, Intel could be worth much more than that for long-term investors. Intel's proven tick-tock methodology and its dedicated fab capacity give it a very strong competitive advantage over industry players.
I think that it had less to do with ARM than a couple of other tech advances over the last 20 years. Intel was far from alone in missing the impact of these developments.
1. 2G Digital Cellular networks in the early 1990's and mid-1990's network build out helped battery drain and mobile phone size. You didn't have to charge your "brick" every night. 2. iTunes and iPod Touch. 3. iPhone capabilities and customer demand.
#1 - 2G phones .... Intel was not interested in becoming a low margin chip supplier. #2 & #3 - iPhone .... was the Apple software and the pricing power that Apple had. I suspect that MIPS had the opportunity at the iPod & iPhone sockets too.
I think it had less to do with ARM and more to do with Apple. If Intel was blind sided, it was the same thing that blind sided RIMM, NOK, .... I also think that it had more to do with Steve Jobs and less to do with Apple.
Supposedly, moving from one process generation to the next takes about 2 years. Tick-tock is a strategy that says update the chip architecture in a release in the middle of this (long) process generation change. How does this give Intel an advantage? Even if does give an advantage, Intel can't prevent someone else from following it. Its like copy-exactly. Good idea but you cant patent it.
Tick-tock is remotely catchy, amongst the rather boring terms used by the engineering industry, so it makes a better than average headline phrase. But linking it to process advantage doesn't make any sense. They say the ant always looks for its own molehill.