OT: Lol Intel lost $4.21 billion in it’s wireless business

[Coronita]

For intel… Losing $4.21billion in a money losing business unit must be chump change…

http://www.bloomberg.com/news/2015-01-16/intel-s-4-21-billion-mobile-loss-would-have-sunk-most-rivals.html?cmpid=yhoo

“The world’s largest chipmaker racked up those losses in a business that reported negative sales in the fourth quarter of 2014. Rather than generate revenue, Intel has been paying customers to use its chips in tablets, trying to build a market presence while it brings out new models that they’ll want to buy. In 2014 it got processors into 46 million handhelds.”

[The-Shoveler]

I am not keen on the chip biz,

I wonder if this is an attempt to take some of QCOM’s biz.

It’s the one thing that kind of worries me about south SD’s housing market, I see it as being overly dependent on QCOM.

[an]

I’ve been saying this for a few years now. Don’t discount the 800 lb gorilla in the room. Their server biz are making big bucks, which allows them to buy market share in the mobile space until they’re also the 800 lb gorilla in the mobile space as well. You see with the Q4 result that although they’re losing money in the mobile space, they’re still making more money as a whole and beating analyst forecasts. Once they start making money in the mobile space, it’ll be very hard to beat.

With the growth of mobile devices and the cloud, I think Intel have the cloud part locked. Now, it’ll be interesting to see how QCOM response. What I think 2015/2016 will bring is that, Intel’s mobile chip will be good enough for high end smart phones and all tablets compare to QCOM’s ARM offering. There’s also a rise in the 2-in-1 in the PC/tablet biz. I can see OEMs picking Intel chip over ARMs/QCOM for the tablets and high end smartphones. This allow them to have a single BOM for both platforms Windows/Android. This will reduce total engineering cost and all them to sell more accessories, which is where the profit margin is. If they can have a single tablet that can have either Android/Windows, then their accessories will have to support only 1 tablet instead of 2.

[Coronita]

[quote=AN]I’ve been saying this for a few years now. Don’t discount the 800 lb gorilla in the room. Their server biz are making big bucks, which allows them to buy market share in the mobile space until they’re also the 800 lb gorilla in the mobile space as well. You see with the Q4 result that although they’re losing money in the mobile space, they’re still making more money as a whole and beating analyst forecasts. Once they start making money in the mobile space, it’ll be very hard to beat.

With the growth of mobile devices and the cloud, I think Intel have the cloud part locked. Now, it’ll be interesting to see how QCOM response. What I think 2015/2016 will bring is that, Intel’s mobile chip will be good enough for high end smart phones and all tablets compare to QCOM’s ARM offering. There’s also a rise in the 2-in-1 in the PC/tablet biz. I can see OEMs picking Intel chip over ARMs/QCOM for the tablets and high end smartphones. This allow them to have a single BOM for both platforms Windows/Android. This will reduce total engineering cost and all them to sell more accessories, which is where the profit margin is. If they can have a single tablet that can have either Android/Windows, then their accessories will have to support only 1 tablet instead of 2.[/quote]

I can see this on the tablet… I’m having a hard time to picture this on the phone though…Phones still seem to be ARM after ARM after ARM….

[Coronita]

[quote=The-Shoveler]I am not keen on the chip biz,

I wonder if this is an attempt to take some of QCOM’s biz.

It’s the one thing that kind of worries me about south SD’s housing market, I see it as being overly dependent on QCOM.[/quote]

Intel has an office here 🙂

[exsdgal]

.

[an]

[quote=flu]I can see this on the tablet… I’m having a hard time to picture this on the phone though…Phones still seem to be ARM after ARM after ARM….[/quote]You’re talking about currently. I see 2016 for Intel smartphone is like 2014 for Intel tablets. 2015 is when Intel can start selling their chips for tablets instead of giving it away.

[Hatfield]

Indel dominates the desktop and server world because that world is almost entirely based on x86 architecture devices. The mobile world is entirely dominated by ARM devices. Unless Intel figures out a way to reconcile that gap, they’re doomed to fail in wireless.

[an]

[quote=Hatfield]Indel dominates the desktop and server world because that world is almost entirely based on x86 architecture devices. The mobile world is entirely dominated by ARM devices. Unless Intel figures out a way to reconcile that gap, they’re doomed to fail in wireless.[/quote]What gap are you referring to? BOM cost, Intel is subsiding for the BOM difference, that’s why they’re losing money. But with 2015 chip, they claim to have BOM parity with ARM platforms. Performance, they’re superior to ARM and battery life, they’re approaching parity. With their fab advantage, I can see them pulling ahead sooner rather than later in the tablet and high end smartphone range. Not sure they can get down to the midrange and low end phone range though.

[CDMA ENG]

I don’t think Intel could “look at themselves” in mirror if they didn’t make an earnest effort at the wireless market.

It’s simply to big of a market not to at least test yourself in.

Win or lose they had to at least be able to tell the stock holders and the Board of Directors that they made an attempt.

CE

[an]

I totally agree. But unlike QCOM, INTC have a huge cash cow that they can lean on (their PC/server dominance), while they catch up in mobile.

[Hatfield]

[quote=AN]What gap are you referring to?[/quote]

The dominant mobile platforms are ARM based. It’s going to take an awful lot to induce a handset maker to retool all the h/w & s/w to switch to an x86 architecture. Why would they expend all those resources only to achieve BOM parity and something allegedly “approaching” battery life parity? It’s a huge, expensive risk with not much payoff.

[an]

[quote=Hatfield][quote=AN]What gap are you referring to?[/quote]

The dominant mobile platforms are ARM based. It’s going to take an awful lot to induce a handset maker to retool all the h/w & s/w to switch to an x86 architecture. Why would they expend all those resources only to achieve BOM parity and something allegedly “approaching” battery life parity? It’s a huge, expensive risk with not much payoff.[/quote]The OEM would disagree with you. Just look at the 46M tablets Intel was able to get their chip into in 2014.

You’re right, ARM is the current king of the hill. My point is, not about today, but about 1-2 years from now. I’m predicting a change of guard as Intel push their way into the mobile market. You’re also discounting volume discount. If OEM can buy the same chip to put in their Android tablets, phones, Windows tablets, Windows 2-in-1, Windows laptop, Windows Phone. That’s a huge proposition. Then there’s the engineering cost of designing two separate tablets (androids and windows) for the same form factor. It would save them money if they can share the hardware r&d cost. Also, I don’t think you understand that most if not all mobile devices made today are made by ODM, not OEM. So, I don’t foresee OEM spending much more to make an INTC base device vs a QCOM device, assume the BOM cost are at parity. Then there’s also the fact that OEM don’t want to beholden to one chip vendor. That fact alone would be enough incentive for OEM to have both.

[Myriad]

While Intel has had substantial losses in the Mobile group, Mobile and IOTs are a must do for Intel. One the main reasons to supply 40+M tablets is to build the distribution chain and to target lower cost producers in China. At the higher end, the new tablet processors are power/performance competitive with Apple/QCOM, especially with the die shrink to 14nm and introduction of 3D transistors into the lower end processors.

Their main weakness has been the RF integration into a SOC, which is QCOMs main strength. However, Intel has been investing heavily into this area and QCOM is not as strong on 4G and later than at 3G.

To me, the argument about ARM vs Intel/x86 is reminiscent of the RISC vs CISC debate decades ago (or various AMD vs Intel iterations). Won’t play out the exact same way, of course, and it will take a number of years. However, what Intel is doing is similar – They are investing in improved design, utilizing their production advantage (technology and production capability), and maximizing their financial advantage.

As someone told me many years ago, Intel has excellent technology/designs, but the true advantage is their production processes, technology, and capacity. They might not be able to out-design you all the time, but they can out-produce you.

Disclosure: I have a long position on Intel stock.

Some interesting links:
http://www.anandtech.com/show/8475/intels-core-m-strategy-cpu-specifications-for-9mm-fanless-tablets

http://www.anandtech.com/show/8367/intels-14nm-technology-in-detail

http://www.anandtech.com/show/8510/idf-2014-intel-demonstrates-skylake-due-h22015

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