He's doing what is called a "solid." Some institutions need to buy in on Intel. They got a slight discount. This downgrade will be forgotten in a couple of days.
I won't name names but one of my friends went to work for Conatus on Monday as a VP (they have several VPs). Her speciality is getting drugs ready to meet certain FDA deadlines. There is no promise that things will work out favorably, but at least she can help keep things on track. She does her due diligence in evaluating employers to work for and thus I am fairly optimistic about the future of this company. But being realistic 90% of companies like this one never get FDA approval. So I am cautious-optimistic.
Oh, the old "Scale and volume" enlargement. We've heard this for years. Intel grabbed 46 million tablets from ARM last year. Market share on phones will be even easier. When the smartphone market goes generic people won't really care what's inside. Thanks for ignoring servers. Who anointed Intel an over 90% marketshare in that space? Certainly not IBM! Taking market share is something Intel has a long history of doing very well.
My view of where the smartphone industry is going. It will be Apple and Samsung for the premium market. There will be a middle tier market with names like Sony, HTC and Motorola trying to stay relevant and slowly losing market share. At the carrier level each of the stores will be pushing their own Chinese/Taiwan private label brand of smartphones. This is what will be pushed on the customer who doesn't care enough to spend premium dollars on an Apple or Samsung product. Intel will be able to co-label at this level and help pay for advertising. "AT&T 4G Smartphone Powered by Intel." Peter is right, there is a large market of people who either can't afford premium or just don't care.
"At a given level of technology, an ARM uses fewer joules per mip and is smaller and that's that. Unless you need to run Windows, why bother?"
Most of us have been on this board for years. We saw these types of posts with this simple logic all the time a few years back. In a perfect world this argument should be all you need.
Within one year you saw 20 to 28% of the tablet market which was ARM fall to Intel. Intel forecasted 40 million tablets but grabbed a bit more. True they lost money on each sale, but with each passing month it was a bit less. Sooner than you think Intel won't have to pay the difference between it and an ARM based SoC/SiP.
What Intel got was credibility. now developers are starting to develop for Intel based devices running ARM (answer to your question "Why bother?" is because Android based Intel devices is where the market is heading).
Something that should keep you up at night was Intel more or less said 40 million tablets last year. It wasn't a goal, it was a limit. They could have picked up even more market share. When Intel can sell it's SoC's for the going rate in the market and turn a profit how much more ARM market share can they grab?
The thing that is nice about the ARM ecosystem is the very thing that will make it hard to fight off Intel. With each ARM partner taking their small part of the market will find it hard to fight off an Intel who is huge and vertically integrated.
I thought about your question and here's the best way to answer it. Where ARM blew it happened over a year ago. The iPhone had current technology, but not always the latest technology. That changed in the 5s when it went to 28nm 64 bit. The largest smartphone manufacturer now has the most current processor in their phone. This ensured that other manufactures who also want current technology will be six months to a year behind Apple in the latest nodes. I am seeing a lot of different specs about where Intel 14nm will land against Apple's A8. For argument sake we'll say it's behind, but not far behind in benchmarks.
I believe what you said is correct a year or two ago. Intel will be pushed out of the A and B tier handset manufactures. The C-tier manufactures ( C for Chinese) are going to be private label for for carriers made with a few different SoC's or SiPs from Intel. But Intel will design an array of phones based on a few different SiPs or SoCs. and source everything and pay for the injection molds. ARM will do the same thing as well. Intel of course can help support the carriers with paying for advertising. Carrier specific generic phones featuring Intel Inside.
This is the C-tier handset manufactures eating the market share away from ARM by offering premium cell phone technology at the $200 price point. The fight will be with ARM at 20nm. How will ARM 28nm do against 14nm from Intel? Demand for 28nm and older nodes will die off as orders fall off. This concept is called 'Inferior technology." Intel did it with servers and will do it with phones. It's not top down, it's bottom up market penetration.
The ARM processor is basically strong enough and good enough to have powered RT devices. They could have powered many interesting and innovative Windows RT laptops. Most of the failure of RT should be pointed at Microsoft and not ARMH. It was mostly based on a new ecosystem, the Windows Metro Apps was based on Microsoft's version of the iTunes store model.. Had this really taken off to the point where consumers didn't care that the ARM processors couldn't run legacy Windows programs RT would have been a success. When Microsoft made the decision to include ARM during the era of the first iOS devices it seemed like a good decision. Now that Intel has power and performance covered on all fronts RT really isn't needed.
The other half of the equation is if you believe ARM has enough capacity to satisfy demand for its products today. If we're talking nodes of 28nm and larger then yes I do think that this is the case. When Intel brings in extra capacity, especially pointed toward the newer smaller nodes this somewhat impacts demand for the newer nodes from ARM (20nm and smaller). More importantly the extra capacity means that older nodes for ARM (28nm and larger) need to fight harder for the remaining orders. We've seen this before, older technology fighting to stay alive with too many competitors with fewer and fewer orders. You know how this story ends.
Jerry Sanders was kinda an idiot, but he did have a point. The point of ARM was that the fabs were constantly being run at full capacity so the economies of scale could be passed on to each customer. The problem that they didn't foresee is something they could have learned from PC users. Some of us demand the latest unlocked Core i7 which so we can water cool it and push it to 5GHz while dropping in a $1000 video card. But for each one of these enthusiasts there are 100 people who would be happy with a Core i3 or i5.
Is the world really demanding more high end Smartdragon processors? Are they willing to pay the $700 for the Galaxy Note 3? Or do they want a $200 smartphone with a MediaTek run of the mill SiP? It's amazing what you can get for under $200.
RT isn't dead yet. Part of the problem is that they have warehouses full of RT tablets needing to find homes that they are still hoping to sell to suckers, I mean unsuspecting fools. Which makes me wonder, how long before all the rechargeable batteries need to be replaced on the unsold merchandise?
I am thinking right now there are meetings being held at Microsoft where people are swearing that RT is a great product but needs to be re-positioned. What we'll probably see Microsoft re-brand RT as "Windows Phone -Tablet." Which of course makes as much as "Core-2-Duo-Quad."
Microsoft has been pushing ARM devices since Windows CE. It's gone nowhere, but they have a long, rich history of lackluster sales with ARM based products and a belief that someday it will all pay off.
The bad news about the XP upgrade cycle is that we Microsoft has to work against those windfall sales from last year. There are some great talking points if you want to bash Microsoft and Intel. Nenni has figured them all out. But the reality is that Microsoft and Intel have continued to grow over last year despite the windfall sales. In a few days it will all get sorted out but in the meantime enjoy the discount on two great stocks.
If you bought Intel thinking it's going to go to 80 next month then get out now It doesn't work that way. If you hold onto the stock it will pay a dividend and over time it will move up to a healthy new level. If you have a small position just hold onto it and forget you own it. Check back in a year and it will most likely surprise you.
Within the next couple of weeks I will be able to break some good news about this stock. If I am not the first to break it I can at least give more insight into the rest of the story that may come out on a brief press release. This is a good time to buy this stock.
Very similar to Windows 8 (except RT is gone). The third item is slightly different. I'm sorry, I am not seeing a radical departure from the old Microsoft.
The San Diego biotech scene is interesting and confusing. You'll see in the annual reports of larger drug makers that they pick up one of these small upstarts. If a company has a decent shot at FDA approval or has received approval its often cheaper for a J&J to buy the company than to try to develop inhouse. From the perspective of a stranger looking in Conatus is doing a lot of things right. Let's hope this all translates to FDA approval and all of us who hold this stock be handsomely rewarded.
ARM isn't dead at 20nm. But they will start to face real competition from Intel starting now going into full pain mode within a year. The fabs that can afford to push 20nm aren't the ones to worry, for now. The backlog will occur at 28nm and older. They will be fighting for fewer and fewer orders over the next year or two. You'll start to see some of them close. As Intel predicted eventually there will be two titans. Intel and ? Samsung? TSMC? Stay tuned.
Today I am gong to, as my hip-hop DJ's say "Kick and old school jam." Back in the day (about five years ago) Paul Otellini, then CEO of Intel was in the hot seat. It had become clear that Intel missed the boat in smartphones as sales skyrocketed and the Intel stock remained stationary. At an investors meeting he made an interesting announcement. For every 622 ARM based smart devices sold they needed one additional Intel server. The profitability on the one server was greater than the 622 smartphones. Keep in mind that this was a time before the $59 smartphones at Walmart.
When it comes to mobile devices it's a race to the bottom. ARM has made no secret that they want to expand sales into 3rd world countries. These are very price sensitive markets. With most of the planet living on $10 a day or less this means that price is the limiting factor.
As the mobile craze further reaches into new markets this means more server sales for Intel. The other push for servers is the Internet of Things (IoT). Cameras that come off your wrist and fly away, snap a blurry picture and return may not be in our future. But things like controllers for sprinkler systems that create custom watering routines for grass based on stats gathered by weather forecasts and amount of shade at different times of the year the area receives would be beneficial. Most of the work would be done on the back end my Intel servers. There are many practical examples that are useful but perhaps not as sexy as smart baby monitors and sports watches.
Back in 2008 I wondered what the next era would be all about. Would it be a software driven era or a hardware driven era. I bet on hardware. Looks like it was a good bet.