I’m on my way to a coffee shop to put together my thoughts for a story. The topic, in my editor’s own words is, “I’d love you to show me how Intel isn’t totally screwed”. As I’m driving, it occurs to me, I have two Android devices on me, both running ARM cores, I’ve got an iPod touch in my glove compartment hooked to my car stereo, also running ARM, and I’ve brought along a Surface RT to actually do my work on – also an ARM based device. The chances are there are some chips made with Intel silicon around me – but it isn’t difficult to see why someone might have a pessimistic view of Intel’s future.
Over coffee and donuts on a beautiful February morning in Chandler, Arizona, I research Intel’s strategy to remain relevant and innovative in a “Post PC” market. PC sales based on their bread-and-butter “Intel Core” CPUs are tanking and despite having every advantage, mobile devices and smartphones that rely on Intel CPUs have yet to really catch on. Intel’s roadmap is public knowledge, directly revealed by Intel’s President, Renee James in their last investor’s call. The business press has discussed and analyzed these statements extensively, and investors seem to be favorably impressed in general – but technology outlets have remained largely silent, almost as if they’re unaware what Intel’s direction is.
That direction may best be summarized as, “It isn’t all about Intel core CPUs, and it isn’t about being tied to any one operating system.”
To be honest, as a former employee, I frequently mention that Intel’s internal culture teaches “Intel is not a technology company, we are a manufacturing company.” That philosophy has been easy to say, but harder to put into practice when Intel Architecture CPU’s have remained such a tremendous cash-cow contributing billions of dollars to Intel profits for so many years.
So, if it isn’t about Intel core CPUs, and it isn’t about being tied to one OS (or the platforms those operating systems run on,) what is it about then? It seems mostly about having the most advanced fabs and foundries in the world for producing silicon based products and maximizing production and profit from those factories. On its face, this doesn’t seem ridiculous. It doesn’t matter what Intel makes with its sand, as long as it makes as much of it as possible and earns the biggest profit it can. It also doesn’t hurt that as far as tolerances, yields and the most advanced results are concerned, there may not be any other manufacturer in the world that can compete with Intel.
We could almost stop there in building a case for why Intel isn’t totally screwed. But the details on how this high level plan may be executed and what it means for consumers and IT professionals is the bigger part of this story.
Intel has spent much of its life in a mutually beneficial but not always amicable relationship with Microsoft. The fortunes of both of these giants have been closely tied to one another. For obvious reasons, Intel actively discouraged employees from acknowledging a “Wintel” duopoly. That may not seem very important in 2014, but in 2001, it was something that was frequently stressed to new hires. This wasn’t just indoctrination or concern about SEC attention – there never was a Wintel duopoly. Each company was a strategic partner with individual agendas, roadmaps and aspirations, and they frequently were not compatible with one another. There was an inherent dependency on the actions of the other that caused Intel and Microsoft to be forced into an often uneasy partnership, but neither company seemed incredibly enthusiastic about it.
Intel has frequently explored ways to remain viable while being less dependent on Microsoft’s fortunes – and the rapid decline in demand for traditional PCs illustrates their desire to become platform agnostic was not unwarranted. The disruption brought by mobile devices may have finally given Intel their opportunity to develop platform independent solutions, but no one said the transition would be painless.
Intel transformed itself before
Intel has precedence for responding to dramatic swings in market realities. Andy Grove writes in “Only the Paranoid Survive,” about “critical inflection points”. At one point Intel was the largest “semiconductor manufacturer in the world,” and this title related not to microcomputer CPUs, but memory chips. Intel found itself challenged by Japanese manufacturers who were turning memory into a commodity product, inexpensive and reliable enough that world class quality was not worth paying premium for. Intel largely put the semiconductor memory manufacturing business, then its strongest business line behind it, and instead focused on their 8086 CPU, which IBM had just tapped as the core processor for its original IBM PC. The transition was a difficult period for Intel, but the long term payoff for making such a bold and risky decision was tremendous.
Can they pull off such a radical redefinition of who they are again?
As an end user, I care as much about what CPU is in my device as Intel cares about what OS runs on their CPUs. If everything works I’m like most users – price, reliability, performance and battery life are my key drivers. My introduction illustrates that right now, non-Intel CPUs are meeting those criteria for me.
Intel won a design win with the Motorola Razr I. Those of us in the States are familiar with the Razr M. The I is the same device, running a 2Ghz Atom processor. Intel claimed a significant increase in speed and battery life versus the ARM based variant. Real world reviews were less generous, but indeed, the Atom processor delivered generally faster response and better battery life for around the same cost. Unfortunately, the RAZR M was only destined for South America and Europe – and that brings us to one of Intel’s liabilities, of which there are several, in competing against ARM in the smartphone market.
Intel did not see smartphones as disruptive to traditional PCs
It is easy with hindsight to think that Intel should have been more aggressively pursuing mobile device technology, but in 2003 the market looked radically different than in 2007 when the iPhone changed the game. Intel’s strategy did not include having the ability to include integrated baseband modems in their reference designs, nor did they see the potential for smartphones to be so disruptive to traditional PC markets. Among Intel’s many guiding philosophies, two important ones are to stick to their core competency and not to compete directly with OEM vendors. Wireless cellular technology was the domain of their partners and OEMs, and not really part of their competency in the technology supply chain. This created a blind spot for Intel that allowed them to fall behind in mobile tech.
Motorola Razr I, intel Inside
It wasn’t until their 2010 acquisition of Infineon that they had a baseband LTE modem in their possession. Even now their baseband modems are discrete chips and only recently they gained support for legacy 3G and 2G networks. This double whammy meant that Intel could not build complete solutions that supported the widest range of consumer demand for network compatibility, and the solutions they have are not integrated into their application processors, which is a less energy efficient design. There is no question that Intel is behind the curve in having all of the components together to compete with other mobile device platform providers, most notably Qualcomm. Strategically, they’ve acknowledged this and are taking steps to correct this.
Yet this is only part of the problem. From a manufacturer perspective, profits on the raw materials of a smartphone are slim. The OEM adds value to a smartphone design. This also isn’t Intel’s core business. They’re poorly positioned to compete with Apple and Samsung in this regard. The business complexity of the model for smartphones is far more complex than traditional silicon. What is the value add in Android handsets? Android hardware is relatively standard. The premium is in name brand reputation, and that relies on build quality, custom skinning and design.
And the silicon is where Intel’s competency is. This is part of why Intel missed phones. As a business unit, they focused on the fact that there was little profitability in their contribution to the OEM smartphone design process.
Intel Sandy Bridge wafer. Credit: Intel Free Press
But as smartphones gained traction an interesting thing happened. The lasting endurance of “Intel Architecture” was always closely related to the size and scope of developing on legacy compatible IA64/32 or “x86” code. It was the dominant developer platform from the release of the original IBM XT until the iPhone and then Android gained traction. If you wanted to make a living writing code, you wanted to be writing on Intel platforms. Suddenly independent app developers were making millions on their iPhone code, and shortly this attracted larger publishers. Despite an initial difficulty in making money on Android, that didn’t stop developers and publishers from seeing the potential and flocking to that platform as well. A mass exodus of Intel architecture developers followed and new developers saw mobile platforms as the path to fame and fortune.
As the developer base shrank through attrition, so did the relevance and demand for classic Intel based platforms. Intel did not see that the rise of smartphones would damage their developer base and hurt the relevance of their core platforms. Intel missed phones and mobile because of a focus on silicon profits instead of the long term damage caused by a migrating developer base. Where the developers go, the users follow.
So it seems Intel’s strategy for remaining a relevant and competitive company focuses on two things – First, keeping profits and productivity as high as possible manufacturing whatever achieves this at their foundries. Second, growing back platform relevance that will encourage developers to provide support for chips that support their own code base. Intel does not see ARM itself as the competition here, it is a fractured ecosystem supported across multiple OEMs, Qualcomm, Nvida, Apple, etc.
No competitor matches the manufacturing capacity, capabilities, or experience of Intel
This may be where Intel has a significant advantage as a player. Intel has direct and complete control over internal design process of beginning-to-end optimization of performance and energy consumption – and only a few other OEM’s approach this in-house capability. None of them have the manufacturing capacity, capabilities, or experience of Intel. Apple is a great example of what a company can do when they have significant control of the design and manufacturing process. This is the reason why Apple tends to outperform and out-optimize the competition. But Apple still has to rely on external foundries to manufacture its silicon. It’s like aftermarket performance vehicle mods versus buying a factory tuned sports-car. You may make that perform better than a BMW M, Mercedes AMG or Audi S – but it is very difficult to give the overall experience, balance, refinement and optimization when you’re putting something together with components, and it’ll probably be more expensive in the long run too. This makes sense to me. But this assumes competing on price and performance. Right now Intel is struggling for mind share among developers and having the right mix of ingredients, specifically the LTE modem. Low powered Bay Trail multi-core application processors with integrated LTE 4G modems as a system on a chip (SoC), could radically change Intel’s relevance in the mobile device and smartphone market. But acquiring the technology, integrating it, and getting past domestic regulators is no easy task. Consider all of the wireless antennas on a typical device. Baseband modem, WiFi, Bluetooth, NFC and more, that all need to be FCC certified before a product can be launched. Just consolidating all of the components into one device is only the first challenge.
So what does this mean about Intel’s future in mobile device markets? Well, that remains to be seen. The roadmap seems to be in place to respond to some challenges that have been overlooked during the tenure of the preceding two CEOs. I don’t think it matters if Intel is dominating in processor sales built on Intel architecture, if Intel can simply make themselves dominant in processor sales regardless of architecture. Intel’s foundries have the highest and most reliable die yields per wafer and they’re far ahead of anyone else. Intel fabs are recognized as “state of the art” – and will almost certainly maintain this advantage as fab technology advances. They can squeeze more profit out of each silicon wafer while delivering a better product. If their new CEO truly doesn’t mind what they’re building or who they’re building it for – Intel built ARM chips could easily become the preferred application processor in mobile devices. Neither Qualcomm nor Apple have their own fabs, they use TSMC. It remains to be seen if Intel will attract any significant use of its foundries to build ARM or other non-Intel semiconductors, but it is an interesting development. This philosophy is not limited to just traditional mobile devices. There are application processors and silicon in every accessory smart device, every wearable gadget, and every home automation solution. Intel is aggressively investigating how they can be the foundries that make the insides of those devices, too.
Intel’s new CEO, Brian Krzanich. Credit: IntelFreePress
At the same time there is no reason why Intel’s traditional processors can’t compete with ARM on performance, reliability, energy efficiency and price. If that is the case it shouldn’t matter what runs on top of their mobile chips, Windows Phone, Windows 8, Android, iOS or any other platform. In the case of Android, getting a reliable version of Android for Intel should bring along the entire Android library of apps – developers can write agnostic code that runs regardless of the underlying chipset. If performance, price and energy efficiency were equal or better on an Intel powered Android device to an ARM based one, I might consider a modest premium for the Intel variant. That could help address the profit portion of the manufacturing process.
Although on the ropes in some ways, Intel shows every sign of still being in the fight and having the qualities to stage a comeback
There are intangible factors that remain, including subjects as trivial as consumer perception of Intel’s brand. Apple remains cool, Intel hasn’t had much social cachet since the days of their dancing bunnymen. Although the current CEO has ambitious goals, the dedication of investors and the board to realizing those goals could derail this ambition before it is realized. If the OS runs better on ARM, poorly implemented OS platforms on Intel would hurt the perception of Intel, not the OS. The competition isn’t going to stand still and wait for Intel to achieve dominance in mobile computing platforms. Finally, Intel still needs to put together some of the pieces before they can even begin to test if significant portions of this strategy will work. Although on the ropes in some ways, Intel shows every sign of still being in the fight and having the qualities to stage a comeback. As an end user, the competition can only give me more options, so I’d like to see Intel pull this off.
(Full disclosure, I am a former Intel employee and own a modest number of shares of Intel stock.)
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I would also love to see a comeback, as you say. Hope Intel can pull it off.
Intel will be stuck with Microsoft for a while, judging from the current situation. They still have a shot with their Bay Trail chips powering Windows 8 tablets.
Getting developers to move away from ARM-based processors for Android will be nearly impossible. Stay with Windows and hope for the best.
It should be transparent to Android developers in almost all cases if Android runs on ARM or Intel. Android runs as a VM abstraction layer between the hardware and the applications.
That is, if you have JAVA on your PC, it doesn’t matter if you’re running Windows on IA64/32, Linux, OS X, or heck, even Android, RT, or iOS. The Java virtual machine means that the code is platform agnostic.
The same thing applies to Android, which is a Java derivative OS. You write a version of Android for Intel, and Android runs almost like an emulator in between your hardware and your apps. You don’t need to port them.
Now, if you meant getting OEM manufacturers to switch from ARM to Android for their hardware devices would be impossible…
Why? i don’t think the OEM manufacturers care if it is ARM or Intel running Android, as long as it runs well. If Intel can offer ARM competitive Atom application processors and GPUs that challenge the current crop of ARMs, if they can undercut on price, or if they can deliver higher performance and far superior battery life…
OEMs might *flock* to Intel.
Bay Trail T quad is pretty impressive. Benchmarks well above the Snapdragon 800 in CPU performance and slightly less than the Adreno 330 on the GPU front. Power draw is also competitive around the same as the Snapdragon 800.
Intel has an additional advantage in being able to control it’s own manufacture process and has experience dealing with smaller die sizes. Being the first to deploy a mainstream SoC at 14nm for instance would likely have revolutionary battery life and very cool running temperatures.
The main issue I believe is that Intel has to sell these mobile SoCs practically at a loss because of extremely cheap, but decent performing competition from China’s mobile chip players.
14nm will be huge
I also think thats the main issue. Intel makes great chips, but they are not use to competition. They have dominated the windows PC market for so long it seems they have lost touch on how to compete in a diverse market like mobile
ARM is the future.
Intel is late to the party.
I don’t think they got what it takes anymore.
haha ARM is the future? Intel is screwed?
Let’s not forget that should ARM disappear it would a be a mere inconvenience, should Intel and x86 disappear the world would come to a standstill.
Intel doesn’t have what it takes? Intel pretty much sets the norm nowadays when it comes to processor technology, especially while AMD is trying to get back on its feet.
In fact seeing an article titled: “Is Intel totally screwed” surprised me quite a bit. World’s largest cpu manufacturer screwed? I think not.
I don’t know about you, but I would trade in every single ARM device I own for a capable x86 pc.
what’s awesome about this comment is i actually think his mind would change if he realized ARM was themselves were a collaboration between apple and acorn computers.
(proof that children / teens ruin tech sites)
yes. arm is the new thin client. it’s not our servers (yet)
Intel cannot compete with ARM in any way whatsoever. They need to start making their own ARM chips or simply fab for other ARM companies at this point. ARM companies like Qualcomm are actually holding back because Intel is nowhere near a threat. Don’t believe me? In 2010 Global Foundries fabbed A7 chips running over 3 GHz clock speed and the Snapdragon 800 was going to be 2.7GHz max clock speed which they held back to maintain hype when they increase it gradually (i.e. 2.5GHz 805>2.3GHz 800 when both are clocked far below their potential). Also Intel’s GPUs cannot compete with ARM GPUs when this year we will have PS3/360 quality (300 GFlops) in a 2W power envelope.
it is different thing being able to run chip on some clock and actually use it on that clock. there are problems like power consumption, heat dissipation and overall stability of such chips
They were stable at 3 GHz. TMSC and Global Foundries have both clocked way above even the frequency we are using today back in 2010. It’s readily available information so I will allow you to find it yourself if you would like to read up on it.
Here is the search, and there are the articles.
The question that isn’t answered is… “Where are the chips?”
I’m not sure I understand you. Can you not find the material I mentioned or are you asking why said chips are not actually produced and used/sold? If the latter then, as I have just said, Qualcomm slowed down their advancement in order to continue cashing in just like Intel have with their node shrinking. The problem with Intel is by the time they reach 2W powwer envelope despite what node they are on at that point they will be at like 1.5GHz clock speed at this rate, where ARM such as Qualcomm will be way over 3GHz and therefore still have the better power per watt processors. Furthermore, if Intel ever WERE to overtake ARM it will be so far in the future that they are already doomed because everyone will have coded their software to be running in RISC (ARM, Android specifically) and the platform will have a larger userbase which is more comfortable with it. There is literally no way for Intel to save themselves with their current schedule. Rather than debate it in the internetsm allow us to return to this article in 5 years tine and see how Intel have fared.
No – I see articles suggesting ARM will be running at 3Ghz in production by 2014 – although the news on the chips first broke in 2010/11.
The reason the chips aren’t here yet seems to be speculation – unless you have inside information you would like to disclose. My contact info is all available above.
Intel is not CISC anymore, you know, right? Hybrid CISC/RISC architecture for quite awhile now. Regardless, the code is really being written for an Android abstraction layer. Theoretically, most software written for Android on ARM should run fine on Android on Intel.
Ultimately, the discussion is a little ironic, because 10 years ago no one would have suggested that ARM and RISC would be a threat to the legacy developer base of Intel x86 compatible code. Yet here we are, and it is a perfectly reasonable debate. Who would have ever thought the ARM Acorn would have a lasting legacy as anything but a forgotten also-ran of the British 8-bit C=64 era of retro-computing?
So fortunes for an instruction set can change radically in a short period of time in this industry. Maybe we’ll see a resurgence of Motorola 68xxx processing in 5 years, and we’ll both be wrong.
If they use TSMC for making those SOC’s I would have to disagree. TSMC is notorious for not being able to reduce the size of the silicone they can make. They have been MUCH slower than Intel in that regard. So heat is going to be a major factor in how fast they will be able to clock up their chips. Sure, they can do it under test conditions(probably active cooling), but in real world usage, where there are varying degrees of cooling (or lack there of.) clocking to 3GHz on a mobile processor is not going to be very practical.
He never followed up to give me any insight as to why his claims weren’t just speculation at this point.
But there are news reports that we should be seeing ARM cores clocked at 3 GHZ in 2014, and that TSMC is one of the foundries that will deliver them. We’ll see.
But yeah, the advantage in reducing silicone size in manufacturing is obviously Intel’s, so it stands to reason that anything TSMC is going to be able to achieve on ARM, Intel should theoretically be able to quickly match on Intel Architecture, if not outright destroy.
The battle between AMD and Intel is kind of the classic example. AMD beat Intel to 1Ghz, but couldn’t produce stable chips in commercial quantities. It was about fab sophistication. Intel still has that fab advantage today.
Intel is huge in PC division. Macbooks and pretty much all Windows Laptops use them, and I’m sure that at least 80% + of Desktops are on Intel aswell. They’re just late comers to the mobile market.
I don’t think intel is totally screwed, because Intel makes the best chips, fact! even their low power ones are equal in performance. Servers and PC’s aren’t going anywhere, and their mobile chips are steadily improving (and they defiantly have the resources to keep improving). Where they have been lacking is modem integration and graphics integrations. Its also difficult to shake the consumer view of Intel and windows, no one thinks Intel inside a phone.
If they where screwed, im sure they could base a chip on ARM and make their own changes to it, similar to what qualcomm does with its krait architecture. That could be awesome and with their manufacturing expertise(14nm), could really do well !
Very good article indeed. Looking forward to read such articles in the future from androidauthority
(Most) Developers still need PCs and perhaps one day servers will be replaced by a Nexus tablet…but until then, Intel has time to gain a bigger share of the mobile market. Competition is a good thing.
Mobiles and tablets can neevr kill pcs.. yes i cant connect my usb or anything to a mobile. i cant burn bluray on my mobile, i cant do most of the things on mobile which i can do on my pc
My Surface RT will connect to my HTC DNA. I can connect my external USB DVD burner to it. I can connect a USB printer. I don’t think the ARM processor could handle decrypting, decoding and burning a DVD in a reasonable amount of time, but it’ll certain connect and read the data on a disk.
The limitations of your tablet have more to do with what the OS supports or doesn’t support than with the hardware platform, in many cases. This is one of the reasons I really *like* Surface RT and sold my ASUS TF300 for it. I still have a Nexus 7 for casual content consumption – but I think it is premature to think that an ARM based tablet can’t replace many of the functions that users require a “real” PC for.
Good happy burning.. lol
My 2tb WD Passport hooks up fine to my Note 3, which powers it from it’s battery, and copies files, streams videos etc just fine. (if you wanna see, it’s on my flickr feed: http://www.flickr.com/photos/jessedegenerate)
Printers work fine on it too.
I just want a file manager that works like a desktop one (drag and drop multi pane is what i settle for)
Apps are the pure lifeblood of any OS, and on RT that’s a total joke.
How did you type this while driving?
“Intel found itself challenged by Japanese manufacturers who were turning memory into a commodity product, inexpensive and reliable enough that world class quality was not worth paying premium for.”
Now, replace “Japanese manufacturers” and “memory” with “ARM” and “SOCs” and one can make the argument that history is repeating itself. The question Donovan raises is whether or not Intel can once again change its business model, this time by making their current products competitive in features and in price, or by replacing (or supplementing) their X86 processor lines with another money maker.
Can Intel remake themselves? I certainly hope so. They make damned good products, and, as an American, I want to see this American company pull through. The new Merrifield & Bay trail processors are either a hail mary pass or a temporary measure that will give way to competitive SOCs that will position Intel as the go-to supplier for a future generation of mobile devices.
Tank You for this very good article.
go to hell windows !!
lol, exactly what i expect from this sites fanbase. idiocy.
Well, I’m writing for them, and I’m a pretty platform agnostic user and professional… But the site is called “Android Authority”. You’ve got to expect there to be some biased readers at a site that is dedicated to a specific platform.
As for Guest’s comment… I’d recommend you take the same approach I did to it.
Don’t feed the trolls. ;)
i know, caught me in a moment of weakness. Probably more like a half hour. As someone who has a fully automated home, has intergrated siri into his plex setup, etc, I just see so much “hurr durr x brand sucks”
platform agnostic is the way to be. the best of all worlds:D
I had often wondered why Intel didn’t seem to be making any inroads into the mobile market. Thank you for helping me understand.
Intel wouldn’t be the first highly successful corporation that became too blase and pleased with itself and doing things “the old fashioned way”, while the world moved on – like Blackberry – leaving them so far left behind that catching up became impossible.
Amazing, that one of the richest corporations in the world could not spring for a few prescient leaders – or even a dozen or more – if need be.
Intel is not doomed, I believe they can still come out on top. Yes arm is making sure that competition will be hard for Intel, but both are still racing to the middle. We all want the power of a laptop in the palm of our hands – whether we know it or not – and no company is close yet. All programing will have to be built from the ground up when said soc exist anyways. If Intel can reach the Holy grail of PC power in the palm before arm, then they can come out on top like they are for the PC. In my opinion, all Arm has done is some money push ups and have secured their place in the never ending PC boxing tournament (and they are punching hard) . As long as Intel has tons of cash the fight won’t be over! Plus the future has this unpredictable quality we can’t over look.
Agreed on all counts with a kicker.
Intel’s fabbed their way out of box canyons before with massive capital spending (R&D plus facilities) and if they get to 14 and then 8 nm processes first, they’ll be in pretty fat city again.
But both Apple and Samsung (and maybe others) bode to keep ARM interesting….
I think Intel can survive anything, but what about AMD? They don’t seem to have any success in mobile by now.
baytrail proves intel can do something.. lets wait and see
Great article (and insightful site comment replies in-thread – which the writers on too many sites never do). Android and Android Authority are really “growing up right before our eyes.”
One little grammar nazi bit, though: “Intel has precedence…” Nope, well it may in may contexts, but in this sentence you meant “precedent.” :)
Thank you, Jim. My personal goal is to interact with the people I write for, not to create stories in a bubble. I enjoy the feedback and I approach writing as having a dialog with readers that expands my understanding of issues. Frequently this gives me a springboard for my next piece. I don’t know why more writers don’t approach it this way. I suppose sometimes the forums can be a rough crowd. ;)
You got me on the precedent. :)