Electronics Weekly Electronics Design & Components Tech News
Asked how the mobile OEMs viewed Intel’s $4 billion worth of inducements to use mobile ICs, ARM evp Pete Hutton replies: “Some are bemused; some are seeing pressure.”
Intel actually reported ‘negative revenues’ on its mobile chip business which was a novel concept to most business people.
“It’s a new business model!” cracks Hutton.
Asked if the contra-revenue strategy had worked, Hutton replies: “Intel are in 45 million tablets but we did 5, 6 or 7 times that amount.”
Asked if he had heard from the users of Intel’s mobile chips if they are likely to stay with Intel when Intel stops paying contra-revenues, Hutton replies:
“We’ve seen a number of examples where a customer has given one slot to Intel and, when Intel stopped the contra revenues, they’ve moved back to ARM.”
“Free drugs only work if they’re addictive,” cracks Hutton.
In the reverse situation where ARM is attacking Intel’s dominant position in servers, Hutton says: “We’re helping various parties deploy the software. We’re seeing the software optimised and we’re getting it ported. It’s an easier job for us to get ARM into servers than it is for Intel to get into mobile.”
There are currently four chip companies selling ARM-based processors for severs.
Although ARM doesn’t strip out its microcontroller revenues it is now becoming a significant contributor to ARM’s revenues.
Of the 53 processor licences signed by ARM in Q4, 23 were for Cortex M, the ARM microcontroller core.
“We now have 24% of the market – up from 19% last year – and that includes the 8-bits and the 16-bits,” says Hutton, “it’s going great guns. It’s significant in the number of units – four billion units last year – and we have five lead partners for microcontrollers.”
Lead partners get involved in the spec and in the design of the core and get early access to the technology.
Asked about the alternative to Finfet technology – FD-SOI – Hutton replies: “We have teams working on FD-SOI libraries. We have a team in Grenoble working on them.”
Asked if ARM has any customers using FD-SOI, Hutton replies: “”Yes we have had a customer for an FD-SOI chip and we may well have had more – we’ve had discussions about it with several customers.”
What will happen to ARM’s participation in the IBM Common Platform Alliance now that IBM has sold its semiconductor business to Globalfoundries.
The Common Platform Alliance develops low-power processor architectures, integrated design flows, and system-level IP on a Common Platform foundry process
Asked if Globalfoundries will take over the Common Platform Alliance programme, Hutton replies: “That would be my assumption.”
Well to my mind Mike, Moore’s Law meant there was inevitability about everyone’s everyday computing needs being delivered by a pocket-sized computer. But it’s not only a technological inevitability but is the most convenient way of computing for a population which is increasingly on the move. And that means, in the absence of roll-up screens, that you want the biggest screen you can put in your pocket. And, once you’ve got a computer in your pocket you want it to be able to connect to every network known to man because all of them are flaky somewhere and sometimes. So I see an inevitability to the large screen pocketable connected computer – the jolly old Phablet.
So call it a tablet
…. or the name I call it by which I’d better not repeat here 🙂
I think if Apple hadn’t put the 3G phone option in the original iPad then the markets could have stayed separated – telephony = phone, wifi only = tablet, and indeed almost every tablet doesn’t have telephony, but when the first one does it defines the breed.
@Mike Bryant what about the 6+? its gigantic! i would definitely put this in the ‘phablet’ category. Although, i completely agree its a stupid term!
Well personally I think phablet is a stupid term created to add confusion. Apple don’t produce one so I’ll give them credit for clarity.
Yes, negative revenues is a new one on me Mike but I assumed it had nothing to do with profits, and that it simply meant that inducements to customers to buy the product totalled more than the revenues coming back from customers. I think MS is the nearest parallel, as you say.
Well actually I see phablets were a 174m unit market last year, according to IDC, not the 40m I quoted, so that would justify the 7x differential. Whether you describe a phablet as a large phone or a small tablet is a toss-up IMHO.
On the ‘negative revenues’ point this is effectively the same as the ‘cashback offers’ for which look no further than Microsoft with the Xbox giving back about $50 per box on something it was already making a loss on. IBM/Lenova and even Hewlett Packard have also done this sort of thing on and off since the 80s, and in other industries Mitsubishi currently does it with vehicles and a certain large plane manufacturer sometimes does it with end of the line models.
I think including what are really just large phones is pushing it more than a little. And even then only gets it to 4.7 times, not your 6 or 7.
But as they say there are lie, damn lies and statistics.
Well it rather depends on whether you include 40m phablet units in there Mike which would make it a 6x or even 7x advantage to ARM.
And ST doesn’t report negative revenues, it may report losses but that’s not the same as negative revenues where you pay your customers to take your product. This really is a new business model.
I think ARM’s maths may be a little off here. If Intel got 45 million tablets then simple maths says ARM got 220-45 = 175 million which is only 3.9 times, not 5,6 or 7.
And STMicroelectronics have been reporting negative revenues for years 🙂
But agree on the M series – a superb but often little noticed success. I’ve been doing comparisons on audio applications, at least on those who could be bothered to supply loan samples when asked, and the ST M4 series of products in particular have excelled.