Replies to post #126759 on Intel Corp (INTC)

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chipguy, not knocking it, but even though >50% GM is great, the raw gross margin dollars probably don't look anywhere near as attractive.

Intel's business is currently at a $53B+/year run-rate. It takes a lot more than a smart toaster or some tacky smart-watch to move the needle. Don't get me wrong, I'm glad Intel is pushing X86 into these markets, but where Intel's strengths as a computing company will really matter is in smartphones and tabs.

[fastpathguru]

I know a company that sell chips in that price range at over 50%
gross margin consistently. Don't knock it. I wonder how many ARM
licensees sell phone SoCs with >50% GM.

Do those Intel "GMs" include any of the "contra-revenue" associated with those sales?

And isn't it oh so convenient how you pick a metric of comparison that ignores Intel's process-related R&D, fab construction costs, etc. etc. etc. (as if developing their bleeding-edge process is "free"), while your same metric applies all of these costs to their fab-lite competitors?

It's the costs that are excluded from Intel's GMs that make them vulnerable, that everyone should be watching. The same forces that fed Intel tons of money to invest in "Intel Inside" (i.e. absolute Wintel dominance) are waning, while another similar dynamic is waxing: "Alternative OSs on Alternative Chips."

You're fooling yourself if you think that EVERYTHING about this new dynamic isn't happening at a faster pace than Intel can match... Process development, chip development, software ecosystem development, end product development and evolution...

There are a wide spectrum of players in this market. Some suck, some are meh, and some rise above the others... Diss the losers all you want, but it's the WINNERS Intel has to deal with. Thing is, everywhere Intel turns in mobile, there's already a winner there, different than the last.

This dynamic is going to result in, essentially, a TIE in the process department by the end of 2014.

The critical thing you constantly fail to comprehend is that Intel has simply never faced-off against a robust alternative consumer platform before.

fpg

(If you feel the need to reply, but your reply will just consist of some variation of, "Because Intel once did X they can certainly do Y now, stupid!" don't bother.)