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And selling for only 32 billion seems really low for a company that significant.
by ngold 6y ago
And selling for only 32 billion seems really low for a company that significant.
- leetrout 6y ago$18B less than Tiktok (rumored valuation at $50B). That's hard for me to grasp.
- baq 6y agoI don’t want no ads on me CPUs
- Jon_Lowtek 6y agoThe flawless execution of these instructions has been sponsored by RAID bug spray.
- leeoniya 6y agoRAID-5 bug spray, presumably?
- Jon_Lowtek 6y agonow with extra parody!
- jmchuster 6y agoHow many ARM chips will the average consumer buy in their life? How much profit will ARM make on each of those chips? How many Tiktok videos will the average consumer watch in their life? How much profit will Tiktok make on each of those views?
- repiret 6y agoI have more Arm CPUs in consumer devices within arms reach at this moment than the number of Tiktok videos I’ve seen in my entire life.
- mumblemumble 6y agoOther people watch more TikTok videos in a single day than the number of ARM consumer devices that you've owned in your entire life.
- ponker 6y agoBut if we are doing nonsense comparisons let’s use the number of ARM clock cycles for devices you own.
- repiret 6y agoIt’s not nonsense - Arm gets paid per device, TikTok get paid per ad impression (and views are a good proxy for that)
- ponker 6y agoBut the pay for each of those is orders of magnitude apart.
- jmchuster 6y agoHere's an estimate of ARM's revenue per chip at 10 cents (profit maybe half that). [1]https://qz.com/741078/a-company-that-doesnt-really-make-chips-dethroned-intel-with-super-savvy-business-moves/ https://qz.com/741078/a-company-that-doesnt-really-make-chip... Here's an estimate of youtube (not exactly tiktok, but not exactly not), revenue at 10 to 30 cents per view. [2]https://influencermarketinghub.com/how-much-do-youtubers-make/ https://influencermarketinghub.com/how-much-do-youtubers-mak...
- jmchuster 6y agoSorry, this is wrong by an order of magnitude. Youtube is making more like 1-3 cents per view.
- nintendo1889 6y ago
- Sebb767 6y agoBy this logic, TicTac should be worth more than all car manufacturers combined, since there are more TicTacs in an 1$ pack than I will ever buy cars in my entire life. And I'm sure their margin is much higher, percentage-wise, at least compared to most car manufacturers. Let's be real here: TikTok is a big social network, yes, but ARM owns most of the embedded market. Every smartphone your average consumer buys runs an ARM chip. And hardware is harder to replace than software.
- jmchuster 6y agoCar manufacturers make about $2k per car. Do you buy 2k packs of TicTac every 10 years?
- Jon_Lowtek 6y agoMaybe ARM should copy the business model of more valuable companies like TikTok by harvesting and selling it's users data. Surely the data flowing through a SOC is worth something.
- DoingIsLearning 6y agoARM doesn't manufacture chips, they license ARM Processor 'designs'. ARM is more of a household name for their use in mobile phones but that is just the tip of the iceberg. I think you underestimate how many ARM chips you have in a single car or delivery truck. Add to that: - farming machinery - construction machinery - factory line automation - elevators, escalators - EV chargers - fridges, washing machines, ovens - medical devices such as drug-infusion pumps, ventilators, surgical machinery, etc. - Auxiliary modules in aeroplanes and shipping containers. - Infrastructure for Road, Rail, Power Grid with ARM processors running headless embedded systems - Anything the size of a pebble with bluetooth connectivity uses nordic's nRF chip (which is yet again an ARM chip) ARM processors are hiding in plain sight in the world all around you. I understand the point you make, from a business standpoint, on how Tiktok might scale. The thing that is bizarre for me and I agree with the parent's sentiment, is how disconnected the valuation is from the real-world impact and objective _usefulness_ of ARM versus Tiktok. Edit: bullet points
- amelius 6y ago> The thing that is bizarre for me and I agree with the parent's sentiment, is how disconnected the valuation is from the real-world impact and objective _usefulness_ of ARM versus Tiktok. Also how easily the technology behind Tiktok can be duplicated compared to ARM. Anyway, it's probably all about the network effect and brand value.
- sjwright 6y agoARM has no exposure to any end consumers and takes the tiniest sliver from each sale—if anything at all. Tiktok can deliver arbitrary content to hundreds of millions of people’s eyeballs around the planet.
- mcdevilkiller 6y agoAlso Intel ME and (not sure, but probably) AMD PSP.
- einr 6y ago
- kelnos 6y agoPer-video profit isn't really meaningful; these kinds of companies report revenue (and thus profit) base on the number of active users. Consider that in 2017, 21 billion ARM chips were manufactured (doubled in 4 years, from 10 billion in 2013), and that ARM's licensing fees are over 2% of chip cost for current high-end designs (and they're talking about raising that even more). They have 95%+ of the mobile phone market, are making inroads in the server market, and will soon be in every Apple laptop, which I expect will grow the market for ARM laptops even outside Apple. It wouldn't be a stretch to find them in common desktop computers after that. They're in smart TVs, washing machines, robot vacuum cleaners, and all other kinds of smart (and non-smart) appliances. Even SSDs have their own embedded ARM chip. And that's just home/consumer stuff; haven't even scratched industrial/commercial applications, of which there are a ton. I could easily see yearly production at over 100 billion chips before 2030, probably even before 2025. While I'd love to see something like RISC-V take off commercially, I don't think that's realistic. Meanwhile, social media users are incredibly fickle; platforms are subject to fad and fashion. Certainly Facebook and Instagram are still huge behemoths, but their growth is nothing like it once was, with people -- especially younger people, trying to distinguish themselves from their older, boring relatives -- flocking to TikTok. I fully expect TikTok will be in Instagram's boat in under 10 years, with some other platform taking its place. ARM seems like an amazingly great short-, medium-, and long-term bet, while TikTok feels like a nice short- (maybe medium-, if they're lucky) term money-maker, and even that feels like a big maybe: I have no idea what their ad revenue per user looks like, but it's probably not great since their audience skews younger. Teenagers and college kids don't have much in the way of discretionary income. Then again, TikTok doesn't pay their creators like e.g. YouTube does, so they get to keep all that ad revenue.
- ponker 6y ago21 billion is 3 per person per year for everyone in the world, including rural goat herders etc. who don’t consume very many. I don’t doubt the number but it’s still wild.
- minzi 6y agoIf you don’t see RISC-V taking off commercially, then why is ARM trying to sell? I ask because my understanding was that they were trying to exit because of RISC-V.
- usrusr 6y agoSomething like Tiktok can myspace in the blink of an eye. Established CPU architectures have enormous staying power.
- posguy 6y agoMIPS sure didn't, same for SPARC. CPU architectures can effectively die in a handful of years just like MySpace, Delicious, Digg and such.
- usrusr 6y agoEven decades after starting to decline both are still less dead than the average former social media fad.
- shakna 6y agoMySpace is dead, dead. You'll still find devices, especially in manufacturing, that are still running on a MIPS, and are essential to the process. You'll still find them in various cheap toys on the shelves. MIPS _should_ be dead, half the manufacturers of the chip have stopped. But, Imagination Technology still sell a considerable number to Apple every year.
- pmarreck 6y agoConsidering Apple is moving their desktops to ARM and pretty much all iOS devices are ARM...
- thinkloop 6y agoWhat if giphy was worth 100x ARM, would it be interesting then?
- otabdeveloper4 6y ago> How many Tiktok videos will the average consumer watch in their life? This number is not unbounded. It will converge to some asymptotic limit. > How much profit will Tiktok make on each of those views? Around a tenth of a cent per view. These huge valuations are purely because people don't do the math and don't know how the market works.
- emiliosic 6y ago... Meanwhile Microsoft is busy buying Tik-Tok (eye roll)
- applecrazy 6y agoSource? Didn’t hear this was happening Edit: https://www.businessinsider.com/microsoft-tiktok-donald-trump-bytedance-2020-7 https://www.businessinsider.com/microsoft-tiktok-donald-trum... This is some very fresh news.
- Bhilai 6y agoMicrosoft buying ARM would be interesting.
- chmod775 6y agoIt is quite simple really. You seem to be under the mistaken impression that valuations in tech are based in any way on logic. They're not. They're completely hype-driven. That's how this year's myspace, which people will have trouble remembering 5 years from now, can get a higher "valuation" than a large semiconductor company with a 30 year track record. Investors and the financial sector are proving time and time again that they're unable to learn from their mistakes, through no "fault" of their own, because apparently it's human nature to just be horribly bad at this. It amazes me that people think investors somehow learned anything from the dot-com bubble, given they've been repeating all of their other major mistakes every odd year or so.
- dna_polymerase 6y agoCompany valuation usually involves more tangible things, like revenue and profits, or at least expected revenues. "Importance" can vanish really fast.
- samunism 6y agoWe don't really live in that world anymore – what is value investing when the Federal Reserve sets the price? More and more, "intagibles" like brand value are becoming more important on balance sheets than investors want to admit.
- WanderPanda 6y agoFor me it is hard to grasp if this really is a paradigm shift or merely some valuation cycle aka https://twitter.com/chamath/status/1280531290635157505 https://twitter.com/chamath/status/1280531290635157505
- kmonsen 6y agoFor me Tesla stock value is where it got confirmed stock valuation diverged from any data points. I understand there is a potential huge upside there, but no real data points would justify anything close to the current valuation.
- WanderPanda 6y agoEspecially in comparison to 9 months ago, the fundamentals did not really change (conpetitive landscape etc.) There was the CyberTruck announcement, though
- kopos 6y agoAnother context to add to this. This might also be part of SoftBank’s fire sale which bought ARM for $32B just few years ago (2018?)
- ksec 6y agoI am starting to see a lot of these similar comments around the internet. I think, it is because people are now so used to Apple and Amazon's trillion valuation, with Apple closing in to 2 Trillion, people think $32B is low or ( relatively ) cheap. Reality is ARM was quite over valued when it was purchased by Softbank.