The Apple / ARM disruption of the microprocessor industry (Intel) gains momentum

“Despite stock price corrections in both Apple (AAPL) and ARM (ARMH) post earnings, together they are leading what is perhaps the most important (and much overlooked) disruption in tech: a manufacturing paradigm shift away from commodity processor manufacturers such as Intel (INTC), to a new model of custom systems on chip (SOCs) designed by device manufacturers such as Apple,” Mark Hibben writes for Seeking Alpha. “This disruption will be a source of new markets and expanding revenue for both companies, making them good long-term investments.”

“The disruptive character of Apple’s design and production of custom ARM processors has been largely overlooked because it flew in the face of conventional wisdom: custom processors such as Apple’s A-series SOCs were an aberration, not a trend,” Hibben writes. “Eventually, economies of scale and superior process technology would [supposedly] allow Intel to assert dominance of commodity processors in mobile devices as it had in conventional PCs.”

“The benefits to the mobile device makers of custom SOCs were mainly in the area of providing a more seamlessly integrated user experience in which Apple devices have always stood out. Intel advocates have not understood how unimportant raw processor speed has become in mobile devices compared to ease of use and hardware/software integration and reliability,” Hibben writes. “My sense is that the process advantage on which Intel’s hopes for cost competitiveness depend will be erased before Intel gets much traction in mobile. I have a growing, though not particularly well supported, suspicion that Intel’s x86 architecture, even in its much enhanced x64 configuration, has simply become obsolete. It had to happen eventually. The lack of mobile competitiveness is just the first sign.”

Apple A7

“And this is where the opportunity really lies for the ARM ecosystem, not merely to be the universal mobile platform, but the universal computing platform for the 21st century,” Hibben writes. “Apple’s A7 points the way to a more efficient computing platform than Intel that can serve in all capacities, desktop, server, mobile,and Internet of Things.”

Read more in the full article here.

MacDailyNews Take: Here, bunny, bunny…

Steve Jobs welcomes Inel's Paul Otellini

[Thanks to MacDailyNews Reader “MotivDev” for the heads up.]

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23 Comments

      1. … boxes had a number of dedicated, custom, chips. These made the hardware among the fastest in its class. Which in no way negated the lunacy rampant at the upper levels of management. Remember Apple while Jobs was on hiatus? Commodore made that seem like a good situation. It would have ended sooner had they not produced some of the best hardware and software around, at the time.
        Thank all that is that Jobs made great efforts to insure his dreams would outlive him.

  1. Intel would have had a chance if they would have looked beyond Windows but I believe they thot everyone would always HAVE to use Windows and Office which had to run on Intel chips.

    1. No, Intel was just so tied to Windows that it couldn’t move away from it without Microsoft’s blessing and approval. And since Microsoft doesn’t seem to be able to do anything right these days, it obviously wanted nothing to do with changing up processors. Just look at how Surface ARM unit sales have gone.

      Intel instead took on a strategy aimed more at corporate purchases and larger units (desktop and laptop PCs, set-top boxes, etc.), and essentially ignored the mobile device market until it was far too late.

      1. Former Intel head, Paul Otellini… til this day has mentioned how he regrets not having accepting Apple’s proposal to produce the chips for iPhone…

        But why look back at the past… Intel could and should use their capacity and still industry leading tech to work with Apple in building A chips…

        It would be a boon for Apple… imagine if they bought a bunch of INTC stock (instead of just their own buyback) ahead of an agreement in which Intel would be Apple’s exclusive foundry… $$$$$$$$$$$$$$$$$$$$$$$$$$$

        Is there a reason why Apple has to turn to Samsung?

  2. Apple was forced to design its own chips in order to achieve low power usage that Intel/Microsoft/Dell weren’t interested in. It’s the same problem the PC manufacturers ran into with Microsoft. The obvious answer to the Microsoft OS failures and slow innovation would have been for the PC manufacturers to produce their own OS. None of them did and now they are all fading while they wait for a viable OS from Microsoft.

    1. The problem with your argument is that as soon as Microsoft heard that a PC assembler, like Dell or HP, was moving to develop its own OS, Microsoft would have dropped it like a hot rock. There’s no way a PC assembler could have put together a team and developed its own OS, something that would compare to Windows or Mac OS, without Microsoft knowing about it. Even funding a third party secretly would be near impossible to escape Microsoft’s little birds.

      1. I think it depends on what era you look at their failure to ‘roll their own’ OS. In the 80’s it was possible to build a usable OS. It the 90’s it would have been a formidable challenge (like it was for AAPL), not least because MSFT was at its pre-DOJ nastiest. You could understand the business case why the OEMs went with MSFT, but you also felt that it cost them dearly, too. What it cost them was they were beholden to Redmond (MSFT’s bytch, each one of them…)

        Watching Dell do that was one thing, but HP really missed the turn. But they were one of many.

  3. This discussion does not acknowledge that Intel could and may already have an ARM license to design and produce ARM chips just like Apple and others have already done.

    It is merely up to Intel if they want to do so and can find customers for their enhanced ARM designs.

    Correct me if I am wrong.

      1. ARM Holdings develops the instruction set and architecture for ARM-based products, but does not manufacture products. – Wiki

        ARM Holdings licenses the chip designs and the ARM instruction set architectures to third-parties, who design their own products that implement one of those architectures—including systems-on-chips (SoC) that incorporate memory, interfaces, radios, etc. Currently, the widely used Cortex cores, older “classic” cores, and specialized SecurCore cores variants are available for each of these to include or exclude optional capabilities. Companies that produce ARM products include Apple, Nvidia, Qualcomm, Rockchip, Samsung Electronics, and Texas Instruments. Apple first implemented the ARMv8-A architecture in the Apple A7 chip in the iPhone 5S. – Wiki

        Also see
        http://appleinsider.com/articles/13/10/30/intel-to-start-manufacturing-third-party-arm-chips-in-2014

  4. Let’s not be too harsh on Intel. They were making a ton of money making x86 chips for Windows machines which were used by 95% of the market. What could go wrong with this strategy?

    When your are highly successful in what you are doing, looking into the future and changing course is extremely difficult. The reason it is so difficult is that shareholders want returns today, not in five or ten years. So Intel keep doing what they were making money doing. This is the same strategy as MIcrosoft adhered to.

    Apple changed course because they had to. In the late 90s they were nearly belly-up. So they trashed their old OS and adopted OS X and they started work on other future projects (iPhone and iPod) that would expand their market and make the company viable long term.

    Apple’s strategy was wildly successful because they happened to be in the right place at the right time, in other words they delivered mobile computing when the public wanted it. Of course, having a CEO like Jobs who would tell shareholders to STFU, helped.

    Just like Microsoft is on a long-term slide towards oblivion, I fear Intel is heading down the same path.

    1. Exactly. Moving towards the future means ignoring short-term stock market reaction to what you’re doing. Look at how Wall St. is punishing Apple at the moment. But they don’t care because they are trying to be 5-10 years ahead of everybody else. And they will be.

    2. Not quite right. Apple delivered mobile computing because Apple CREATED a true mobile computer with a mobile computing OS. Everything else, even old Palm OS, was far from possibly handling mobile computing needs.

      Apple created the “right place at the right time” because Apple was visionary. Apple saw how its sales of laptops far outpaced iMacs, which far outpaced Mac Pros and Xserves. People wanted small and portable, so Apple took the next leap.

      The challenge for Apple is to actively avoid becoming Intel or Microsoft. It can’t be satisfied with continuing improvements to existing products. While that would be a cash cow, eventually you run out of meaningful improvements to make (see Windows). Apple HAS to keep looking for the Next Big Thing, keep looking at what could make people’s lives easier and let them do things better.

    3. Apple beats Intel and other losers like MSFT and SUMGOO because they understand the rules laid out in the innovator’s dilemma: if you don’t embrace innovation and a willingness to disrupt your own business, someone else will do it for you.

  5. Can Apple make an A8, 9, 10, that will at some point be BETTER than Intel? Will I be able to run FCP X on it?
    Apple has one chip for mobile, and one for desktop. How long will this go on?
    Maybe an AMD/ARM combo chip ?

    1. I think I know what you mean by ‘BETTER’. But the situation calls for matching the CPU for the purpose of the device. It’s not the PC market. Intel didn’t notice.

      As for combining PC CISC architecture with ARM RISC architecture, I think you need to do some reading to comprehend WHY the two will NEVER be the same. CISC is granny’s gas guzzling mobile home. RISC is sonny’s renewable energy source motorcycle.

      http://en.wikipedia.org/wiki/Reduced_instruction_set_computing

      http://en.wikipedia.org/wiki/Complex_instruction_set_computing

  6. Intel peered into their plastic crystal ball and forsaw a huge PC market for as far as that ball could see. Nowhere in that visage was a mobile computing world the size that it is today. They have the resources to design their own SOC. The question now is is why are they waiting? Perhaps they’re not. Before long the real time penalties for running any OS in emulation will be small for the vast majority of users. The key is whether Intel can create that system and in the end have an advantage. The trade-off do cost, power consumption, performance and flexibility are the key. It’s quite a risky venture however. I’m not sure Intel would go it alone. But if they showed Apple the next greatest thing, and it really was that, Apple may or may not be able to switch from the ARM system soon enough to support Intel. It might take a consortium of smaller players with a vision. There’s a lot of what-ifs.

  7. A few years back it was hard to imagine Intel not being the leader in CPUs. Just amazing to see what has happened. They may have seen something of this coming but not been able to easily switch paths.

  8. Intel could have kept an iron in the fire. But they blew it with the Atom processor, as I’ve been pointing out (and fending off rubbish counter claims) for years now.

    Intel: It’s the future. It’s the “Post-PC Era”. Don’t sell a PC chip into a future and a device market that doesn’t want it. You got on the wrong train. Ride over. Please exit to the rear.

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