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Author: khrushchv Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14304  
Subject: FKA: INTC redux Date: 12/2/2012 2:22 PM
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mungofitch has posted here about how he thinks INTC is a good deal:

http://boards.fool.com/fka-intc-30267039.aspx

I like INTC too. But one of the questions lurking for me has been the issue with transitions to mobile platforms and the demise of x86 desktops and laptops (certainly not in the enterprise, though).

My fear about INTC not being competitive in this space was allayed a bit this evening (in CH) when I read this review, posted on the SA AAPL board:

http://www.anandtech.com/show/6330/the-iphone-5-review/12

Looks like the Atom is nipping at the A6's heels...
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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12982 of 14304
Subject: Re: FKA: INTC redux Date: 12/2/2012 2:44 PM
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But one of the questions lurking for me has been the issue with transitions to mobile
platforms and the demise of x86 desktops and laptops (certainly not in the enterprise, though).


A valid concern, eventually.
To my mind, Intel has breathtaking margins almost entirely because of the x86 franchise.
Fortunately for them, there is (for now) still a breathtaking amount of software tied to that architecture.
If that ends, when that ends, to the extent that that ends, the breathtaking margins end.

But they are also a very formidable competitor in their own right in
terms of being able to build things that no one else can yet build.
That's enough to keep them earning a very nice living even if the moat years end.

Looked at this way, the desktop/mobile battle per se is irrelevant, as
x86 could be in either space and non-x86 could be in either.
If such a figure were handily available, I'd watch things like the
aggregate dollar value and units shipped for x86 based systems of all types.
Not the relative market or processing share of Intel or x86, but the absolute level of those.
The rise of mobile shipments isn't important, it's the possible fall in these numbers.
When that starts to go seriously into decline Intel won't be too compelling.
They'll still be nice, and still profitable, but no longer compelling.
This is based on the not-unreasonable notion that there will always be some
client for the high margin cutting edge chip devices, even if it isn't buyers of phones.

Jim

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12988 of 14304
Subject: Re: FKA: INTC redux Date: 12/3/2012 6:27 PM
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This is based on the not-unreasonable notion that there will always be some
client for the high margin cutting edge chip devices, even if it isn't buyers of phones.



A similar argument could be made about Hewlett-Packard; cutting edge 3-D printers or whatever. All the same a market perception that a company's earnings are in (permanent) decline because of rapidly changing technology is a powerful thing. There are sharks in these here waters.

kelbon

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Author: TomFoolNC Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13000 of 14304
Subject: Re: FKA: INTC redux Date: 12/4/2012 3:17 PM
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while Intel may not be winning the mobile latform battle vs ARM, all these mobile devices need to access cloud based applications that still use x86 servers, so there is still growth in the server market, if perhaps not the desktop market. Might be worth taking a look at revenue Intel generates in each segment and do some modeling of growth/decline rates.

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Author: TMFinept Big red star, 1000 posts Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13013 of 14304
Subject: Re: FKA: INTC redux Date: 12/5/2012 2:54 PM
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Intel's process and manufacturing advantages and vertical integration are more than sufficient to keep its foot firmly in the door insofar as mobile is concerned for the time being. Its partnerships in the PC space will lead to design wins in mobile, I am quite certain.

Current Atom (Bonnell) architecture SoCs, as khrushchv points out, are already quite competitive with current ARM-based competition insofar as power and performance are concerned. Intel should be able to keep pace even without substantial architectural improvements thanks to its process technology - 22 and 14nm processors are already on the roadmap for 2013 and 2014 respectively. It should also be able to leverage the same process technology to push prices down.

That buys Intel time to bring to bear its excellent IP and design capabilities to continue molding the Atom SoC to suit emerging mobile needs.

Moreover, Intel does more than just make CPUs. They make GPUs (although these are not currently built into Atom SoCs). They make baseband chips. They make flash memory. They make memory controllers.

Intel has the capacity, moreso than almost anyone other than Samsung perhaps, to deelpy integrate components into SoCs and then spit out end product. How about a future Atom with all of the above items built in - imagine how much surface area that would save on a PCB. Imagine the power savings and the cost savings too. That makes for a very interesting potential play on the mobile space from a player that is currently considered totally out of the game.

I like Intel too. The demise of x86 is a red herring.

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Author: ifkn Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13017 of 14304
Subject: Re: FKA: INTC redux Date: 12/5/2012 5:45 PM
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Intel should be able to keep pace even without substantial architectural improvements thanks to its process technology - 22 and 14nm processors are already on the roadmap for 2013 and 2014 respectively. It should also be able to leverage the same process technology to push prices down.

I am not sure I understand. Moving to a new process node is challenging with low yields initially. It is better to fab processors with higher returns until the process yields improve. Therefore the Atoms for phones - tens of dollars - are on 32nm while Server/Desktop/laptop CPUs - hundreds of dollars - are on 22nm.

Moreover, Intel does more than just make CPUs. They make GPUs (although these are not currently built into Atom SoCs). They make baseband chips. They make flash memory. They make memory controllers.

Intel has the capacity, moreso than almost anyone other than Samsung perhaps, to deelpy integrate components into SoCs and then spit out end product. How about a future Atom with all of the above items built in - imagine how much surface area that would save on a PCB. Imagine the power savings and the cost savings too.


In phones: Qualcomm's 8960 - 28nm with integrated LTE baseband (Intel's lack LTE) and GPU - is shipping in products already.

Another factor working against Intel is that Apple and Samsung, 50% of the market, design their own application processors. The remainder of the market - Huawei, ZTE, Sony, HTC, RIM, LG, Lenovo, Nokia etc. - are in varying states of distress and would need a compelling reason to switch. While it is a mistake to write off Intel in phones (and tablets), so far they have been competitive rather than compelling.

The demise of x86 is a red herring.

Agreed.

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Author: TMFinept Big red star, 1000 posts Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13019 of 14304
Subject: Re: FKA: INTC redux Date: 12/5/2012 7:33 PM
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I am not sure I understand. Moving to a new process node is challenging with low yields initially. It is better to fab processors with higher returns until the process yields improve. Therefore the Atoms for phones - tens of dollars - are on 32nm while Server/Desktop/laptop CPUs - hundreds of dollars - are on 22nm.

Initially yes, but once the process is matured, you have the capacity to produce higher clocked, more energy efficient CPUs in higher volumes. New process is proven and refined on high-margin parts and then used to bring lower cost, higher performance parts to the market thereafter.

The costs associated are inevitable and they have already been paid on 22nm. I don't think Intel would be committing to deliver 22nm Atoms early next year if it was losing money on a marginal basis.

Qualcomm's 8960 - 28nm with integrated LTE baseband (Intel's lack LTE) and GPU - is shipping in products already.

Intel does make LTE modems, though. I don't think it's a stretch to imagine that they will be included on forthcoming products, although I am not clear on which and when.

Another factor working against Intel is that Apple and Samsung, 50% of the market, design their own application processors. The remainder of the market - Huawei, ZTE, Sony, HTC, RIM, LG, Lenovo, Nokia etc. - are in varying states of distress and would need a compelling reason to switch. While it is a mistake to write off Intel in phones (and tablets), so far they have been competitive rather than compelling.

That's a great point.

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