I Told You So! (Episode 2) [JTSOS May 2011]

[Originally posted on my Just This Side Of Sane blog on 2011/05/09.]

Way back in November, in a blog article called "ARM's Cortex-A15 CPU, and how it will change your world"", I closed with this paragraph:

So here's the real left-field question: given the power and BoM cost savings, how long now before Apple ditches Intel completely for ARM?

In a follow-up ("Desktop ARMs - and what they'll mean for Microsoft"), I expanded on those thoughts, opening with:

If Apple finds that the ARM processors out-compete Intel on price and power consumption, and at least match x86 for performance, the choice to switch is going to be a no-brainer.

And lo, it came to pass. Again.

Today, Charlie Demerjian published a very interesting article entitled "Apple dumps Intel from laptop lines" in his own blog, "Semi Accurate".

It seems as though I've been a tad prescient. That, or well-informed.

The rest of my blog article contained some other, equally dramatic, predictions. Well, let's call them "predictions" for now. One, which I've since admitted came from insider sources (in the first "I Told You So!"), was that Microsoft was porting Windows and Office to ARM. There were several more that are waiting to be proven.

Now here's another, just to keep your interest whetted. Rik Myslevski has written a well-informed article for The Register, titled "Intel's Tri-Gate gamble: It's now or never". In it, he adds a throw-away speculation near the bottom of the last page: "Intel could license the ARM architecture and start buiding its own ARM variants in its own fabs, using its 22nm Tri-Gate process. That's unlikely, but stranger things have happened."

Stranger things indeed. And I think that Rik is well and truly on the money. Intel's executives are very, very far from dumb. They are painfully aware of ARM's squeeze on their markets, both from above and below, as I'd outlined in that first blog article. Intel really has three obvious plays they could try:

1. Find a transformational technology that puts them in contention with ARM but retains x86 compatibility.. Intel's Tri-Gate announcement was clearly an attempt at this play.

2. Try to find a way to put ARM out of business, or at least weaken it. We've not seen this attempted seriously yet, and it's reasonable to wonder why that is.

3. License ARM cores for desktop use, and keep in the market by following the market..

I contemplated in the second blog post:

Here's a statement I never thought I'd make: with a stock and cash exchange, Apple. Could. Buy. Intel.

Now things start to add up.

* Apple needs a top-tier ARM supplier. Their relationship with Samsung, their current ARM fabrication partner, is reportedly getting a little rocky. Industry reports suggest that they're considering switching to Intel chip fabs.

* Intel needs an answer to the ARM squeeze on x86.

* Apple has tons of ready cash.

What it all adds up to is the possibility that Apple could invest in Intel, both commercially and financially, to license the ARM cores, and set up new fabs to make Tri-Gate ARMs, for both their iOS and MacOS products.

It would make a great deal of sense. It would also give Apple the power to put the squeeze on Microsoft. If only Apple has access to the Tri-Gate ARMs, it leaves Microsoft out in the cold - or rather, the far-too-warm - when MS start to produce the ARM versions of Windows, which will only be able to run on old-school pre-Tri-Gate hardware.

Microsoft will have to consider a very similar investment in Intel, for the same reasons, before Apple can lock them out.

Whichever way you look at it, Intel's prospects may well have brightened.

LATER NOTE (2011/05/18): it seems that one or two people may have read this blog, after all. :) Paul Otellini of Intel was put on the spot in an investors' meeting about the possibility of Intel using Tri-Gate to fab ARMs, and did his level best to dampen speculation: "The short answer is 'No'."

Mind you, if Apple came knocking, with barrow-loads of dollars in tow...? It's possible that Otellini's playing a wooing game, as his next comments could be construed as a come-on: "We have [...] an ARM architecture license. The important thing for us is to figure out how to get paid and how to be present. And we think the best way to be paid and present [...] is to build best-of-class chips."

EVEN LATER NOTE (2011/05/28): perhaps Paul Otellini wasn't reading from the hymn-sheet after all...Intel's CFO Stacy Smith appears to be a lot more positive to the idea of Tri-Gate on ARM, and specifically mentioned Apple as a possible buyer (of devices, not Intel!), according to a Reuters story this week.

Now, bear in mind that a CFO's words probably carry even more weight in the financial markets than the CTO's. After all, CTOs have been known to make some pretty daft comments - but the CFO is the person the money listens to. Smith said that an Apple deal was "Not in the works today". To the untrained observer, that's a flat denial, but it's more likely to be coded speech for, "We're not manufacturing yet, but a deal's cooking." We shall see. Keep watching this space!

Intel's ARM replacement? [JTSOS, Feb 2011]

[Originally posted on my Just This Side Of Sane blog on 2011/02/15.]

So Intel has announced their ARM-killer device: the "Medfield".

Medfield is a power-constrained dual core Atom. Although Intel hasn't said as much, it's reasonable to expect that they'll be making system-on-chip (SoC) devices using the Medfield core, particularly given recent acquisitions that enhance their silicon portfolio to include modern wireless and graphics support.

Will it be enough?

Unlike Microsoft, Intel doesn't have a great history of entering markets opened by its competitors

It's a hard one to predict. Unlike Microsoft, Intel doesn't have a great history of entering and then dominating markets opened by its competitors. In fact, it's often struggled to retain control of its own core markets. AMD, for example, has taken and retained a significant portion of Intel's market share with its lower-cost x86 processors. That's despite being a market follower, not a market leader, and hence always a generation behind its larger rival. (It's notable that AMD hasn't attempted to compete in the mobile device space, preferring to concentrate on CPUs for desktop and server products.)

ARM CPUs achieved their popularity because of three killer benefits: great processing power per watt, a really low price:performance ratio, and small physical size, all of which earned them a massive lead in the small embedded systems market.

But that's not why ARM dominated their competitors. The real reason has little to do with those benefits. ARM achieved their lofty position by moving from being a chip manufacturer to being a processor core licensor. At a stroke, they improved their cashflow, as intellectual property (IP), once created, doesn't have a lead time to manufacture, and you don't have to warehouse huge stocks of IP somewhere air-conditioned, waiting for someone to buy it: "dead money" until the customer orders them and pays the invoices. They made those difficulties, endemic to manufacture, someone else's problem.

That's why ARM survived successive boom-busts, but the real success came from the number of companies who licensed ARM cores and embedded them in their own products. It reads like a high-school register call of everyone in the embedded device space. I'm not going to list them here: go to ARM's site and read it. It's long - no less than 158 licencees and foundries - and very impressive.

Intel's biggest problem is going to be that it's going to be fighting a war on 159 fronts

Intel's biggest problem is going to be that it's going to be fighting a war on 159 fronts - including ARM, of course - if it wants to claim for itself some of ARM's market. It's going to be doing so against opponents who are well armed, well-entrenched and fanatical to their cause. It's going to be trying to make alliances with sovereign powers that are well-disposed to ARM, cynical of Intel, and little inclined to switch, unless the benefits over ARM are very, very compelling.

Intel's Atom offerings to date haven't exactly set the world alight - well, unless you count heat dissipation. Potential partners have responded to Intel's bugle with a resounding..."Meh." Those that did venture to make Atom-based products found that their netbooks, supposed to change the portable computing battlefield, instead met a "Meh" from the buying public too.

This has put Intel in a very difficult position. The Atom was specifically designed for portable computing devices, and the indifference that met netbooks has, by association, hit Atom too. Intel is scrambling now to find a niche in which Atom can play successfully, and my feeling is that Medfield is probably their last serious attempt to achieve a real share of a sector in which they've never really sat easily - and their partners, burnt in the netbook fiasco, are going to need a lot of persuading to put big money behind Atom a second time.

Intel's Atom customers have a single point of supply; a single point of failure

And let's not forget the point I made above, the biggest difference between the two companies. ARM is a licensor, with a huge number of partners all making their own devices, and a very healthy cashflow that can only be damaged if manufacturing problems hit all their licensees at the same time. Intel is a chip maker, and - as the recent $700m recall of the "Cougar Point" chipset demonstrates - its customers are very vulnerable to Intel manufacturing issues: a single point of supply (for Atom devices) means a single point of failure, whereas they can buy ARMs from almost anyone.

I have no doubt that Intel will be marketing Medfield aggressively - and maybe, just possibly, that might tip the scales. But I can't help but think that it's the wrong product, too little, too late. AMD seems doomed to be the Intel wannabe that can't win, but won't die. And now Intel tries to be the same thing to ARM.

Ironic, no?

Microsoft: Linux is at the end of its life-cycle. Oh really? [JTSOS, Nov 2010]

[Originally posted on my Just This Side Of Sane blog on 2010/11/21.]

Nikolai Pryanishnikov, president of Microsoft Russia, has reportedly claimed that Linux is at the end of its life-cycle.

I think that comes under the category of, "Well, he would say that, wouldn't he?"

There are a lot of companies that'd envy that kind of "end of life-cycle" product!

Linux works on just about every hardware platform bigger than a PIC, supports a mind-bogglingly large range of hardware, is used on everything from the smallest gadget to the world's most powerful supercomputers, and the average person in the street probably has at least five to ten times as many Linux OS licences as they have of Microsoft products. There are a lot of companies that'd envy that kind of "end of life-cycle" product!

ARM devices are squeezing Microsoft out from the bottom up, on embedded devices, and the top down: the new Cortex-A15 based chips will create Linux-friendly servers that should be hugely more power-efficient than the Intel/Microsoft combination manages - and Microsoft doesn't currently have mainline ARM products (Windows, Office) to defend its space - not yet, anyway. I blogged about the consequences earlier this month.

Pryanishnikov's comments form part of a recent FUD campaign Microsoft's been waging against Linux, and Open Source in general. (I blogged about more of it a month ago.) The campaign says more about Microsoft than Linux and Open Source Software (OSS).

The more Microsoft tries to chop off Open Source's Hydra heads, the bigger the problem they create.

The more frantically Microsoft tries to chop off Open Source's Hydra heads, the bigger the problem they create for themselves. Desperation is hard to hide; increasing desperation, even more so. The solution for MS, of course, is to accept Open Source, concede that MS doesn't have answers in a number of OSS's key markets, and probably never will now, and change the business model to work with OSS, rather than paying lip-service in public, and waving knives behind the scenes. I don't think Microsoft has the ability to make that change, though. It would involve admitting that revenues have peaked, which wouldn't please Wall Street one bit - but better restructure now than face a collapse later, which is where MSFT is heading without some creative thinking that has to happen now.

Ironically, conditions in both customer and stock markets could well mean that MS is closer to end-cycle than its competition.