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Subject:  Re: Wassup with Arm? Date:  7/10/2001  7:14 PM
Author:  captainccs Number:  940 of 118808

Hi Paul:

Yes, I read all four of Moore's books. I hope I understood them! ARM is a funny gorilla.

The Gorilla Game is predicated on the Microcosm, on computers. ARM does produce processor cores but these are not restricted to computers -- they live in everything mobile and embedded. The Intel x86 basically powered the IBM PC and Windoze basically enabled the IBM PC. They are one paradigm players. ARM is inside lots of things that belong to different paradigms from PDAs to cell phones to security chips to stuff in cars, game players and whatnot.

The next difference is that when the IBM PC tornado exploded, Intel was capacity constrained but ARM will never be because they don't have fabs. Maybe some of their licensees will be capacity constrained but not ARM. In that sense, ARM is more like Microsoft than Microsoft itself, It does not even have to shrink wrap copies of ARM chips, all it has to do is to collect the royalties (easier and cheaper than shrink wrapping with no inventory problems :-)).

To return to the tornado question, there could be a PDA tornado, a G2 cell phones tornado, a G3 cell phones tornado, a security chip tornado, a car stuff tornado, a game player tornado and many whatnot tornados. From ARM's point of view, all these areas are their bowling alley pins and the tornado, for them, could be just the shipment of ARM cores in general. In my mind the big question is, how many cores does ARM ship in contrast to MIPS, Transmeta, ARC and others. The growth year over year is impressive. The market share of cell phones is impressive. Their growth relative to Transmeta and MIPS is impressive.

So why the share price contraction? Because they were valued at bubble levels and the bubble burst. As per DOW Theory, all stocks go up and down with the market. ARMHY is being brought down to reasonable levels from where it will explode once the bears go away.


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