Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Boy my friend Cinncinnatus, You are missing out on a lot of things if you take everything this literally all of the time. And in particular if you use such strong statements to others as if a major transgression had occurred when the problem was a mispelling or failure to issue a statement that covered all of Samsung's products. My blanket statement was no more out of line than the attention grabbing title of this article. Maybe per your standard you should ding Ashraf for that too
I have no doubt that the intent of what I said should have been clear with a little further thought. Do we all have to say all of the words so you can get it right?
If you don't loosen up you will miss out on more things in the future. There are many very good books you will never understand. Maybe you have yet to discover that there is much in this world that is not letter perfect by your personal definition. Don't expect others to go by your standard.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Otellini's response to a possible Apple iPhone deal at the outset is classic Intel management style, i.e., the expectation that decisions are 100% data driven. Before anyone takes me too literally, the reality is never that perfect, but this an Intel management process that goes back to Andy Grove. To give credit where credit is due, it is the strength and success with which this philosophy has been implemented that has created the manufacturing powerhouse Intel is today.
The problem is that if you wait until you have convincing data on a highly innovative consumer product opportunity, you will be too late. This is the problem Microsoft is having now and Intel has had in the past.
Let's see how well Intel treads as they start to make decisions out of the box in order to keep up with the fast moving mobile web device market with minimal feel good data to lean on. With PC revenues on the decline, I am sure they are more motivated. The good news is that Brian Krzanich may have the skills and the credibility inside Intel to make the change necessary for success in the mobile device world. This is probably one of the reasons he was picked.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Yes Intel's shipment increase is a great start from a small base. Let's see how the trend holds up in terms of actual sell through to the final customer and as seen by other companies that provide this kind of data.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Ashraf and others,
I apologize for not being clearer but I believe we are all talking about the big volume applications and not minority plays like current Windows 8 based mobile products.
Samsung manufacturers about every consumer device there is to manufacture and I was not trying to be holistic in my comment. There was no intent to disseminate misleading information. What would be the point in that?
My comment was regarding the use of Intel mobile processors in a major way in Samsung mobile devices, especially where they compete directly with in-house manufactured radios and processors. I would think that was obvious from the subject of the article!
To be clearer this time this would be Galaxy phones as well as Samsung Android tablets. I am not trying to say they won't make an Android phone or tablet with Intel inside as many will try that at least once, but at this point that would be test case and not a major commitment.
As Apple pulls out, Samsung is going to face large financial pressures to load its Fabs with processors and radios for its own products, at least to the extent it is overall cost effective. Just as Intel does, Samsung pays a heavy price for an underutilized multibillion dollar Fab. Intel devices will have a significant uphill battle getting designed into Samsung's Android products. I would not count on that happening in any major way anytime soon, or maybe ever.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Thanks Eddie B for another viewpoint that must be taken into account. For those who think the Intel-Apple story is over, think again. Nothing is cast in concrete here, especially with two new insightful people at the Intel helm who would appear to have no baggage in this area..
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Ashraf,
I have found the SA acceptance process unwieldy and in several important cases I encountered personally, not timely. So I have elected to put my articles into my SA Instablog instead. You are welcome to take a look.
I could write many more Instablogs but in my case there is no incentive. Spending the maximum time that is realistic in making investment decisions is the right priority for me at this point in time.
I take a significant amount of time to write my posts and they have both positive and negative content. They are based on the extensive study and reading that I do almost everyday. I believe my comments are objective and based on many years of successful high technology investing experience. Yes they are not perfect sometimes but I am not alone. This is not a forum for perfection, far from it. That is obvious by the poorly researched and off the mark articles that are published everyday on SA and ditto for many of the comments.
You are more than welcome to criticize what I write as you often do. I take no issue. This is all part of working towards exposing the fundamental truths involved with focus on those that are most important to making the most successful investing decisions.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Ashraf, Ehud,
Thanks for the source on Intel's capacity status. Fair enough, thank you. Glad to hear it. The referenced Seeking Alpha citation above said they were running at 60% in April which is not at all good. This "reduced run rate" may have represented in part process transitions that are in process and the burning off of inventory that would soon become obsolete.
Now the question is how much of that new product that is filling up the pipeline in anticipation of the usual huge pickup in biz just before the holiday season actually gets sold at 60% style margins.
In the old days, Intel did not get much sell through information beyond building inventory in the summer doldrums. I suspect this is still true due to obvious reasons. The Fall is when final sell through happens big time.
I believe we will all be waiting for design in and product success data from Fall forward. This is very interesting and exciting times. I have never seen so many very significant and different pieces in motion across technology sectors before: Cloud, big data, analytics, flash storage, mobile web, point of sale mobile payment, video delivery, PC sales slowing i favor of mobile, etc. etc.
The number of Google Android user going from 400M to 900M in one year is phenomenal. Having gone through the 1995-2000 internet buildout boom bust, this is looking like an equivalent if not much bigger deal. The consequences include putting the power of a more powerful mobile internet in everyone's hands.
My take is that there is enough room to make Apple, Google, Samsung QCOM, maybe even Intel and many others cos. even more prosperous. The question is when, how and who gets the biggest market share and maybe more importantly earnings. If we knew that we could all get rich very quickly.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Intel needs Apple a lot more than Apple needs Intel at this point in time. That of course could change later. I think Brian Krzanich is the kind of guy who can rise above the chatter and see the win-win of the two step Apple approach: (1) Apple A series ARM based processors now and (2), a mutually agreeable plan for Apple to migrate to Intel designed and fab'd solutions. Ideally this includes a cost effective, low power SOC with on board LTE radio at some point in time.
Brian has been with Intel a very long time and has seen the problems the Wintel arrangement has created. I bet he can also see that a 100% bet on Google Android based mobile devices has its share of problems.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Let's not major on minors. Of course everyone is using Intel in PC's. There is no choice. How successful are those existing Atom tablets? How successful will those Android and Windows 8 tablets running "Baytrail" be and how much profit will they be bringing in? Is there any sign that Samsung will be designing in Intel in their mobile phones? We'll see how things turn out. Its the bigger picture that counts.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
PS #2: I would add one more time that there is no way that Samsung will become an Intel customer. Samsung is going to end up with a huge amount of installed capacity as Apple moves its A series microprocessor and memory production elsewhere. Beyond that Intel and Samsung have been true direct competitors in memory for many years.
Apple is not currently a competitor to Intel per se, they are in fact a customer using Intel processors in all of their PC's. Apple will become an indirect competitor if Intel is successful in mobile without them but that day has not yet arrived and maybe it won't.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Ashraf, for the many reasons I have said before, you make final conclusions before their time.
I am still waiting to see the Intel mobile device design ins that are likely to generate the success stories that you are forecasting.
Alternatively I see a fragmented Android business that leads to the same chaos that has contributed so significantly to the Windows PC problem since the very beginning. The tolerance for malware and SW/HW quality and reliability problems associated with the Windows and Android environments is going down as users see the alternatives they now have. This is afterall 2013 and not 1998. This is becoming especially true in the higher end products where the profit margins are.
In the meantime Intel is being hurt by the failure of Microsoft's Windows 8 and Microsoft's associated failure in the mobile device business, a train wreck one more time. Server related sales cannot make up for these losses. Maybe Microsoft will do better with Win 8.1 but that also remains to be seen.
PS: Where do you get your Intel fab loading data. Are they really running at capacity? And if so are they just filling a product pipeline in anticipation of design ins?
You certainly have your share of fan boys here -- do you guys all know each other or something?
As to Intel's server business we are in full agreement that Intel's owns this market. It is Intel's market to loose and that is not likely.Yes there will be a market for lower end server chips and ARM may make some headway here but even that remains to be seen.
As to profitability, >60% of Intel's profits come from chips being sold into Wintel PC's. A shrinking PC market and selling into an established and highly competitive mobile chip world where they do not have a monopoly could make road kill out of those 60% margins. It remains to be seen if the greater number of transistors per unit area, power reduction associated with FinFET structures and overall performance enhancement are sufficient to provide competitive pricing while maintaining margins. After all, a mobile device is not a supercomputer, at least not yet. The power trade off is a big one but 9+ hours are possible with today's iPad. How much are people willing to pay for a few additional hours and relatively small incremental processor performance they can actually see? Consumers will spend some real dollars on the former but not that much for processor speed.
Intel's ability to maintain 60% margins has yet to be proven despite your claims other wise. And Intel as far as I know has yet to get design ins of its new mobile chips with any major player. To be clear I do not consider Lenovo, Acer or even a possible Google Motorola phone equivalent a major players at this point in time. That could change but it hasn't yet. Intel needs a partner that has 15% plus worldwide market share in order to enter this market in sufficient volume to make it worthwhile, and even that may not be sufficient.
ARM does not have chips. They provide patented designs. You can mix and match and modify as Apple does to produce processors specific to a given product. You can add radio capability in order to have a single chip solution as Samsung does (System on chip, SOC). ARM is continually adding new designs that incorporate new features or variations of earlier products.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
I have no doubt that the intent of what I said should have been clear with a little further thought. Do we all have to say all of the words so you can get it right?
If you don't loosen up you will miss out on more things in the future. There are many very good books you will never understand. Maybe you have yet to discover that there is much in this world that is not letter perfect by your personal definition. Don't expect others to go by your standard.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
The problem is that if you wait until you have convincing data on a highly innovative consumer product opportunity, you will be too late. This is the problem Microsoft is having now and Intel has had in the past.
Let's see how well Intel treads as they start to make decisions out of the box in order to keep up with the fast moving mobile web device market with minimal feel good data to lean on. With PC revenues on the decline, I am sure they are more motivated. The good news is that Brian Krzanich may have the skills and the credibility inside Intel to make the change necessary for success in the mobile device world. This is probably one of the reasons he was picked.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
I apologize for not being clearer but I believe we are all talking about the big volume applications and not minority plays like current Windows 8 based mobile products.
Samsung manufacturers about every consumer device there is to manufacture and I was not trying to be holistic in my comment. There was no intent to disseminate misleading information. What would be the point in that?
My comment was regarding the use of Intel mobile processors in a major way in Samsung mobile devices, especially where they compete directly with in-house manufactured radios and processors. I would think that was obvious from the subject of the article!
To be clearer this time this would be Galaxy phones as well as Samsung Android tablets. I am not trying to say they won't make an Android phone or tablet with Intel inside as many will try that at least once, but at this point that would be test case and not a major commitment.
As Apple pulls out, Samsung is going to face large financial pressures to load its Fabs with processors and radios for its own products, at least to the extent it is overall cost effective. Just as Intel does, Samsung pays a heavy price for an underutilized multibillion dollar Fab. Intel devices will have a significant uphill battle getting designed into Samsung's Android products. I would not count on that happening in any major way anytime soon, or maybe ever.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
http://bit.ly/14xGkVc
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
I have found the SA acceptance process unwieldy and in several important cases I encountered personally, not timely. So I have elected to put my articles into my SA Instablog instead. You are welcome to take a look.
I could write many more Instablogs but in my case there is no incentive. Spending the maximum time that is realistic in making investment decisions is the right priority for me at this point in time.
I take a significant amount of time to write my posts and they have both positive and negative content. They are based on the extensive study and reading that I do almost everyday. I believe my comments are objective and based on many years of successful high technology investing experience. Yes they are not perfect sometimes but I am not alone. This is not a forum for perfection, far from it. That is obvious by the poorly researched and off the mark articles that are published everyday on SA and ditto for many of the comments.
You are more than welcome to criticize what I write as you often do. I take no issue. This is all part of working towards exposing the fundamental truths involved with focus on those that are most important to making the most successful investing decisions.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Thanks for the source on Intel's capacity status. Fair enough, thank you. Glad to hear it. The referenced Seeking Alpha citation above said they were running at 60% in April which is not at all good. This "reduced run rate" may have represented in part process transitions that are in process and the burning off of inventory that would soon become obsolete.
Now the question is how much of that new product that is filling up the pipeline in anticipation of the usual huge pickup in biz just before the holiday season actually gets sold at 60% style margins.
In the old days, Intel did not get much sell through information beyond building inventory in the summer doldrums. I suspect this is still true due to obvious reasons. The Fall is when final sell through happens big time.
I believe we will all be waiting for design in and product success data from Fall forward. This is very interesting and exciting times. I have never seen so many very significant and different pieces in motion across technology sectors before: Cloud, big data, analytics, flash storage, mobile web, point of sale mobile payment, video delivery, PC sales slowing i favor of mobile, etc. etc.
The number of Google Android user going from 400M to 900M in one year is phenomenal. Having gone through the 1995-2000 internet buildout boom bust, this is looking like an equivalent if not much bigger deal. The consequences include putting the power of a more powerful mobile internet in everyone's hands.
My take is that there is enough room to make Apple, Google, Samsung QCOM, maybe even Intel and many others cos. even more prosperous. The question is when, how and who gets the biggest market share and maybe more importantly earnings. If we knew that we could all get rich very quickly.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Brian has been with Intel a very long time and has seen the problems the Wintel arrangement has created. I bet he can also see that a 100% bet on Google Android based mobile devices has its share of problems.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
What about the Intel fab utilization question?
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
Apple is not currently a competitor to Intel per se, they are in fact a customer using Intel processors in all of their PC's. Apple will become an indirect competitor if Intel is successful in mobile without them but that day has not yet arrived and maybe it won't.
Intel Won't Build Apple's Chips; It Still Makes No Sense [View article]
I am still waiting to see the Intel mobile device design ins that are likely to generate the success stories that you are forecasting.
Alternatively I see a fragmented Android business that leads to the same chaos that has contributed so significantly to the Windows PC problem since the very beginning. The tolerance for malware and SW/HW quality and reliability problems associated with the Windows and Android environments is going down as users see the alternatives they now have. This is afterall 2013 and not 1998. This is becoming especially true in the higher end products where the profit margins are.
In the meantime Intel is being hurt by the failure of Microsoft's Windows 8 and Microsoft's associated failure in the mobile device business, a train wreck one more time. Server related sales cannot make up for these losses. Maybe Microsoft will do better with Win 8.1 but that also remains to be seen.
PS: Where do you get your Intel fab loading data. Are they really running at capacity? And if so are they just filling a product pipeline in anticipation of design ins?
http://seekingalpha.co...
Intel: Busting Another False Myth [View article]
You certainly have your share of fan boys here -- do you guys all know each other or something?
As to Intel's server business we are in full agreement that Intel's owns this market. It is Intel's market to loose and that is not likely.Yes there will be a market for lower end server chips and ARM may make some headway here but even that remains to be seen.
As to profitability, >60% of Intel's profits come from chips being sold into Wintel PC's. A shrinking PC market and selling into an established and highly competitive mobile chip world where they do not have a monopoly could make road kill out of those 60% margins. It remains to be seen if the greater number of transistors per unit area, power reduction associated with FinFET structures and overall performance enhancement are sufficient to provide competitive pricing while maintaining margins. After all, a mobile device is not a supercomputer, at least not yet. The power trade off is a big one but 9+ hours are possible with today's iPad. How much are people willing to pay for a few additional hours and relatively small incremental processor performance they can actually see? Consumers will spend some real dollars on the former but not that much for processor speed.
Intel's ability to maintain 60% margins has yet to be proven despite your claims other wise. And Intel as far as I know has yet to get design ins of its new mobile chips with any major player. To be clear I do not consider Lenovo, Acer or even a possible Google Motorola phone equivalent a major players at this point in time. That could change but it hasn't yet. Intel needs a partner that has 15% plus worldwide market share in order to enter this market in sufficient volume to make it worthwhile, and even that may not be sufficient.
Intel: Pricing And Margin Strategy [View article]