4 ms·

The thing is, it's not gonna help to have a "Steve Jobs" nor will any degree of understanding the competition help if you're used to ship an expensive high-marg

by _yosefk 10y ago

The thing is, it's not gonna help to have a "Steve Jobs" nor will any degree of understanding the competition help if you're used to ship an expensive high-margin product and along comes a low-margin competitor. Neither ARM nor TSMC attempt to make the kind of profit that Intel is used to making and this is the real problem for Intel; even if it wins 75% of the mobile market by shipping adequate chips at adequate prices, the profits won't be anywhere near what it gets in the PC market. (Of course this is just as true about Apple as it is about Intel, and I think their latest quarter results testify to it just as much as Intel's. Actually, the surprising thing about Intel (which is not true about Apple, Steve Jobs and all) is the degree of their dominance in the market for anything resembling a PC - a computer where you can get work done; one might expect both AMD and non-x86-based workstation products to do better, certainly Android is a bigger threat to iPhone/iPad than any competitor ever was to Intel in the PC space.)

petra 10y ago
Something about margins I don't get: Intel's Gross margin is about 80%. In the fabless ecosystem, the fab usually gets 50% and quallcom is usually above 50% , something even 65% . So the total combined margin is as high as Intel or more. So why does Intel fail?
- _yosefk 10y ago
  All of these companies sell many different products and I'd guess that their reported overall gross margins will be different from the margins of any given product. For instance, I rather doubt that either TSMC or Samsung get 50% margins when making Apple's chips.
  - petra 10y ago
    In Apple's case it makes sense to lower margins to increase profits.Just common sense. But why not in general ? why does Wall Street hates that so much ?
- Brakenshire 10y ago
  Benefits through competition? Intel is only one company, it's competing with a whole ecosystem of companies, who can all iterate and find efficiencies on chip design, and on manufacturing. And those improvements which are specific to the processor type will inevitably get passed around over time.
- deleted 10y ago
  [deleted]

by _yosefk 10y ago

petra 10y ago

Something about margins I don't get: Intel's Gross margin is about 80%. In the fabless ecosystem, the fab usually gets 50% and quallcom is usually above 50% , something even 65% . So the total combined margin is as high as Intel or more. So why does Intel fail?

_yosefk 10y ago
All of these companies sell many different products and I'd guess that their reported overall gross margins will be different from the margins of any given product. For instance, I rather doubt that either TSMC or Samsung get 50% margins when making Apple's chips.
- petra 10y ago
  In Apple's case it makes sense to lower margins to increase profits.Just common sense. But why not in general ? why does Wall Street hates that so much ?
Brakenshire 10y ago
Benefits through competition? Intel is only one company, it's competing with a whole ecosystem of companies, who can all iterate and find efficiencies on chip design, and on manufacturing. And those improvements which are specific to the processor type will inevitably get passed around over time.
deleted 10y ago
[deleted]