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ARM is open. So that means they would have to compete with the whole world both on chip design, and fabbing, for a low power chip, with margins lower than what
by petra 4y ago
ARM is open. So that means they would have to compete with the whole world both on chip design, and fabbing, for a low power chip, with margins lower than what they are used to.
Sucsess(as measured in valuation back than, not today, that's how managers measure themselves), was far from certain.
- vlovich123 4y agoRight. Big company disease caused Intel to miss the biggest CPU market and relegated to big metal servers because they got undercut. It’s still a miss for the business and the CEO regardless of how managers/VPs measure themselves. CEOs are supposed to take a longer term strategic view. Since the mobile revolution Intel stock peaked at 2x from before 2007 while Qualcomm has done about 2x better than them. Of course part of that is cellular chips / licensing. But there’s also other CPUs that were competing with Qualcomm. Maybe that’s why Intel didn’t bother to compete (Qualcomm SoC is CPU+cellular if I recall correctly). It’s still a lesson on the importance of keeping a foothold for the lowest volume market even if you’re not making any money as long as the cost is sustainable - cutting every unprofitable part of the business leaves you for disruption. Same thing happened to Microsoft with smartphones and Google with social.
- mepian 4y ago>Of course part of that is cellular chips / licensing. But there’s also other CPUs that were competing with Qualcomm. Maybe that’s why Intel didn’t bother to compete (Qualcomm SoC is CPU+cellular if I recall correctly). Intel had a cellular modem business which they formed in 2011 and sold to Apple in 2019.
- vlovich123 4y ago4 years after smartphones became a thing. It’s a bit too late and no one really bought their chips in the high end phones.
- ksec 4y ago> Intel had a cellular modem business which they formed in 2011 They acquired* from Infineon. And completely messed it up.
- szundi 4y agoSadly staying in everything is death by a thousand cuts. It is hard to have all the strategies at once. Magic is finding out what of those can fly and it is not a manager but a leader quality to do well with new fields. Although sometimes managers feel the obvious moves for the short term sometimes better.
- jacobr1 4y agoIt is also a lesson for the cost-cutting that is popular right now. Sure, trim fat and waste - but R&D and and test projects in new areas are important for future potential markets. Keep some of that alive even it currently isn't profitable so that you have paths to future markets.
- vlovich123 4y agoI mean, Blackberry was huge and the market was still rapidly growing with no signs of slowing down. The addressable market was even bigger since even back then lots of people didn’t have cell phones and the majority were still feature phones (but more and more people were ditching landlines instead). Sure, it can be hard to know when to stay in, but the “death by a thousand cuts” is not a financial problem. These are often rounding errors to continue. It’s a question of focus. And Intel clearly made the mistake of thinking they didn’t need to focus on mobile.
- qwytw 4y ago> ARM is open Qualcomm still has a 60-70%+ market share in the $300+ Android phone market and their gross profit margin was similar to Intel until last year so it's obviously doable. And XScale/Intel was probably the best positioned company to dominate the ARM SoC market back in the mid 2000s.
- stefan_ 4y agoWell they also have success in WiFi & Cellular, ironically two markets that Intel also participated in and never succeeded in doing anything, ever. Truly an astonishingly mismanaged company.
- szundi 4y agoI feel that when every management book starts do bring up a company as an example, one should just sell the stocks in 2-3 years. Like Intel and its OKRs.
- mdellabitta 4y agoARM is not open... You can license the IP.