4 ms·

This is exactly the logic that led Intel down this path. They thought they were avoiding a field with low margins and could deepen their manufacturing advantage

by shimon 8y ago

This is exactly the logic that led Intel down this path. They thought they were avoiding a field with low margins and could deepen their manufacturing advantage by remaining focused on the high-margin data center business. Meanwhile, the growth in mobile/GPU/SOC chips was so massive that it enabled Intel's competitors to actually catch up on manufacturing. Those competitors are going to eventually compete in the high end, and it's an uphill battle for Intel to become competitive in the fields they've ignored to date. If Intel does survive, it will be as a company with far lower margins in a brutally competitive environment. Read Ben Thompson on this: https://stratechery.com/2018/intel-and-the-danger-of-integration/ https://stratechery.com/2018/intel-and-the-danger-of-integra...

samfisher83 8y ago
Which of intel's competitors that make mobile chips are doing as well as intel? Please give me an example. I gave you numbers for QCT which makes mobile chips. TMSC and Samsung are going to spend money on R+D on chips irrespective of what intel does. Intel has a moat in the x86 market it has none in the ARM world. Read porters 5 forces and you will see why going into the mobile world made no sense for them. In my opinion Intel throwing money at lower margin business would not make sense to me. I guess we will find out what happens in the future.
- medunham97123 8y ago
  Before I left Intel in 2013, they had recognized that the money was really in the value added chain of the mobile segment (i.e. iTunes). But the same stagnant culture that prevented them from seeing and embracing the mobile revolution also prevented them from making things like the Intel AppStore work. At this point, Intel really is just a vertical implementation of a company like TSMC.
- bluGill 8y ago
  The problem is we are forecasting the future. Today Intel makes better product that their mobile competitors. However those competitors are making their product better and better all the time. Already companies are starting to look at those cheaper mobile CPUs and ask if they are good enough, some are answering yes, and there are signs that more will in the future. For a long time intel could hold all this off - sure competitors were cheaper, but intel was enough faster that they were worth it just because you could get more done with them (time is money). However intel has been facing issues with the laws of physics that limit their ability to get better. As their competition catches up intel has nowhere to go.
  - samfisher83 8y ago
    If they did go make mobile chips what is their value proposition? How are they any different than any other chip maker. Qcom has its modem what does Intel have? They have generated 50 billion in cash over the last 5 years. Let the shareholders pick who they want to invest in.
    - bluGill 8y ago
      If they don't make mobile chips what is their value proposition? They used to be on the forefront of what manufacturing could do and thus the fastest. However everyone is running into limits of physics, meaning their competitors are catching up. Can they find a next step? I don't know. I'd benefit if they do (faster CPUs would help me), but if they can't I benefit as well (I switch to cheaper mobile chips that are just as fast)

by shimon 8y ago

samfisher83 8y ago

Which of intel's competitors that make mobile chips are doing as well as intel? Please give me an example. I gave you numbers for QCT which makes mobile chips. TMSC and Samsung are going to spend money on R+D on chips irrespective of what intel does. Intel has a moat in the x86 market it has none in the ARM world. Read porters 5 forces and you will see why going into the mobile world made no sense for them. In my opinion Intel throwing money at lower margin business would not make sense to me. I guess we will find out what happens in the future.

medunham97123 8y ago
Before I left Intel in 2013, they had recognized that the money was really in the value added chain of the mobile segment (i.e. iTunes). But the same stagnant culture that prevented them from seeing and embracing the mobile revolution also prevented them from making things like the Intel AppStore work. At this point, Intel really is just a vertical implementation of a company like TSMC.
bluGill 8y ago
The problem is we are forecasting the future. Today Intel makes better product that their mobile competitors. However those competitors are making their product better and better all the time. Already companies are starting to look at those cheaper mobile CPUs and ask if they are good enough, some are answering yes, and there are signs that more will in the future. For a long time intel could hold all this off - sure competitors were cheaper, but intel was enough faster that they were worth it just because you could get more done with them (time is money). However intel has been facing issues with the laws of physics that limit their ability to get better. As their competition catches up intel has nowhere to go.
- samfisher83 8y ago
  If they did go make mobile chips what is their value proposition? How are they any different than any other chip maker. Qcom has its modem what does Intel have? They have generated 50 billion in cash over the last 5 years. Let the shareholders pick who they want to invest in.
  - bluGill 8y ago
    If they don't make mobile chips what is their value proposition? They used to be on the forefront of what manufacturing could do and thus the fastest. However everyone is running into limits of physics, meaning their competitors are catching up. Can they find a next step? I don't know. I'd benefit if they do (faster CPUs would help me), but if they can't I benefit as well (I switch to cheaper mobile chips that are just as fast)