More a lack of financial commitment by anyone in the WinRT ecosystem to spend the money to make legacy Windows software run on ARM chips even by emulation the way Intel has with Android on x86. Your repeated boasts that the whole world was going ARM meant nothing in the real world when none of them were prepared to invest properly in the ecosystem. The same fate awaits ARM in servers and the big players there will remain x86, Power, Sparc and mainframeZ. Only ARM's dominance in micro-controllers i.e Cortex-M is safe long-term as each succeeding Atom generation will ask more severe performance/price questions of ARM chips in mobility.
This is the most important stimulus for the economies of the world since the last oil price collapse decades ago, only this time there is genuine oversupply rather than an artificial reduction. This is like a gigantic world-wide tax cut for consumers and businesses. Also it now means that QE can now begin in trillion-Euro earnest in Europe today and will also be prolonged in the USA, UK, Japan for much longer to counter the deflationary effect. China will also benefit as it is so resource-hungry. The oil price will also stay low for a long time as shale fields are very quick to develop and deplete so can be phased in and out when price fluctuates meaning the days of $100 oil will be over for many years to come. World-wide employment should also now benefit from the recovery as it has not so far. Equities will also make new records as Gold declines and Inflation remains mute.
'But where is the money going to come from to finance this potential shipment for TSA?'
The TSA will provide it and it will appear as a cash liability on the income sheet as deferred revenue. This is standard practice for govt agencies dealing with small companies with not much cash(flow). On successful completion the profit part of the contract will then be handed over by the TSA. This is not just theory as I have seen it in action with another small company, Astrotech, when dealing with govt agencies like the USAF/NASA.
Buldoc was a hopeless expensive dreamer and this company would never have made any profit under him no matter how high the revenue. McGann will run this company on a tighter basis and make it profitable eventually if the revenue is there. Today is a small-time hit to take for a much brighter future. Obviously it would be better if today is part of a broader BoD move to remove DMRJ from the equation but even with DMRJ retained the future is now brighter as McGann knows how to create shareholder value in an ETD company unlike the clown he replaced who just wasted it instead.
That's based on a couple of things. One, part of this reorganization was to drive efficiency, to get the consistency across the platform, to be utilized, and to get the efficiency of people, of hardware, of software, of all of that. The other one is, as we move into the second half of this year especially, SoFIA, which we said was designed for this segment, has no BoM or difference really starts to ramp, and you saw we've already internally qualified our first SoFIA, the 3G version.
We said the next version, the LTE version, would be in the first half of next year, and that will ramp through the year. So as those come in, they take a lot of that cost delta out, and that's -- where we're feeling fairly good about the $800 million.
Stacy Smith (CFO):
Yes, and on the linearity of the $800 million improvement, there's really at the highest level three things that are improving our profitability this year, so first is bringing SoFIA into the product mix. That helps us both from a standpoint of the SoC cost that SoFIA has and the contra revenue dollars associated with the bill of material offset that we've been providing, which we don't plan to provide with SoFIA. That is back-end loaded. We're bringing SoFIA into the family as we speak, but it becomes really significant volume for us when we get into the back half.
The second one is the ramp of LTE to offset some of the investments we've been making there. That ramp is under way now, but I would expect the back half line to be higher than the first half. So that also is a little bit more back-end loaded. And then the third is, as we've said, we're shifting the investment profile, and that's more linear across the year, so those are the three items and two of those three does put more of the improvement in the back half.
Chris Danely (Analyst - Citigroup):
Great, and then for my follow-up, a question for Brian, just on the MCG business. So Brian, I guess we're still losing a little more than $1 billion a quarter, but you said that those losses will go down. Any color you can provide on that? Anything you can give us in terms of your overall goals, or goals for the mobile business this year, either in units or profitability, or anything else there?
Brian Krzanich (CEO):
Sure, Chris. So what we said for 2015, so if you remember, step back, in 2014 we said look, we have to go out and establish a footprint here. We have to get ourselves known in this market, be considered a serious player, and get the developers attracted -- both the hardware and software developers interested in IA, so we set a goal, a unit level goal, saying we knew we were serious and we bought parts that were not necessarily designed for this segment, and that's where the BoM cost deltas came from.
For 2015, we feel like we've done a very nice job now of establishing ourselves, we're one of the top producers of silicon in this segment, and our goal right now is from a unit perspective. We think we can just grow roughly at what the market will grow for tablets, so we don't need to go out and necessarily outpace the market or anything like that for this year, from a growth perspective.
Instead, we're going to focus on two segments and that is one, as you just said, getting our cost profiles down, making it so that we're much more cost effective, and then as a result, getting the loss out. Stacy and I committed to drive $800 million out of this business for 2015. We believe we have a solid plan to go do that.
Intel the company made $20.7m troll so if anyone is ignoring the obvious it is you !
SANTA CLARA, Calif., January 15, 2015 -- Intel Corporation today reported full-year revenue of $55.9 billion, operating income of $15.3 billion, net income of $11.7 billion and EPS of $2.31. The company generated approximately $20.4 billion in cash from operations, paid dividends of $4.4 billion, and used $10.8 billion to repurchase 332 million shares of stock.
For the fourth-quarter, Intel posted revenue of $14.7 billion, operating income of $4.5 billion, net income of $3.7 billion and EPS of $0.74. The company generated approximately $5.8 billion in cash from operations, paid dividends of $1.1 billion and used $4.0 billion to repurchase 115 million shares of stock.
"The fourth quarter was a strong finish to a record year," said Intel CEO Brian Krzanich. "We met or exceeded several important goals: reinvigorated the PC business, grew the Data Center business, established a footprint in tablets, and drove growth and innovation in new areas. There is more to do in 2015. We'll improve our profitability in mobile, and keep Intel focused on the next wave of computing. "
The ARM server threat is entirely negligible, any IO/memory benefits that you think Seattle/X-gene has over Avoton will be countered by 14nm Denverton which Intel can price low enough to extinguish any nascent ARM threat. As for Power 8 you really should look up its enormous bandwidth/cache/memory numbers, it really operates on another planet to your toy ARM chips.
p.s. Only Suse and Ubuntu ARMv8 releases are official, Red Hat which is 2/3 of the linux o/s market is still a WIP.
Intel's increasing revenue, profit and marketshare numbers prove every year that the competition is being beaten back, only an irrational religious troll basher like you can not admit this reality.
Hector saved AMD from bankruptcy with his offloading of uncompetitive FABs just before this uncompetitiveness became apparent i.e. broken 32nm gate-first process. What punished AMD was they could not design a proper competitive successor to the Athlon Core after a decade+ of trying. This happened under Dirk Meyer's watch.
The loss is just noise compared to the $4-5bn profit cashflow Intel has every quarter. Intel's server division also ran at a big loss for many years subsidized by PCs but look at it now standing proudly on its own having conquered the market and now running with big profits. Intel's mobility division will follow the same trajectory too as it outpaces its competition year after year with its superior design/process synergy. This is how you rudely crash a market and quickly take over when you have the brains and money to do it.
$4bn very well spent as virtually overnight Atom has become the most popular non-Apple tablet chip. In comparison for how long has the Nvidia Tegra family been trying to do the same thing and failing ? Your great hope Denver, which you was pumping for years without even seeing its specs, has been replaced after only one product cycle with a standard ARM A57. WinRT, Denver, ARM servers, x86 decline etc you have been wrong over every major prediction you have made, What is your great irrational anti-INTC hope now ?
Also notice that quarterly mobile revenue rose to ~$200m from $1m showing that the contra-revenue phase is beginning to end as cheaper more integrated x86 chips come online which need less subsidization. Also a couple of very potent quad-core Moorefield LTE-A phones by Asus and Lenevo have just been released at a cheap unsubsidized price, ~$200, which will start the x86 phone invasion in earnest now. Intel has seen off the ARMy off its own Windows/Server turf with ease and is now counter-attacking ARM home territory with great effect. Not quite how you dreamed your fantasy decline of x86 is it ?
So let's recap, what is currently supported is LAMP opensource webserver software for X-Gene on Ubuntu and Seattle on SUSE. This is not an invasion more a small scale incursion by the first two purpose built ARM server chips. Let's just say for arguments sake they started getting traction because of performance/price Intel would just sacrifice Avoton profit to beat the ARMy on this metric knowing that Xeon would still keep bringing home the server profit bacon. The only serious server threat to Xeon is openpower Power 8 because it has differentiated often superior performance unlike the ARMy efforts.
x86 server revenue marketshare is less than its unit share so there is growth potential in terms of asp against the unix chips and that is what has been happening, xeon server asp has been steadily rising.
'Red Hat has an estimated market share between 65% and 80% of enterprise distributions.
SUSE estimates that about 25% of corporate Linux users run its SLES distribution, making it the second-largest supported Linux OS.
And the winner is?
Red Hat is the best choice for companies that need a server platform to run their own applications. It's also the winner for many companies because it's the biggest and strongest brand. Even if, from a technical or integration perspective, a company might be better off using SLES or Oracle Unbreakable Kernel, they stick with RHEL because it's reliable software from a reliable company. Ubuntu's parent company Canonical seems to have a hard time convincing Fortune 500 businesses of its prowess, limiting adoption there.'
p.s. what type of software do you write/support ?
How big is Ubuntu server marketshare compared to the truly mature and professionally supported established Linux server distributions like SUSE and Red Hat ?
An o/s shell is not a software ecosystem, that is no different to WindowsRT. Is Oracle supported ? MSServer ? Sybase ?