Intel hasn't missed the boat on tablets or phones, they will be there shortly.
It takes years to design and tool a fab to build a new chip. Intel started the R&D process years ago to maximize battery life. But, soon they will be in lots of phones and tablets.
The part of Intel/SoC/iPad/Tablet/Phone world that people don't understand is that there is almost no profit in making low end phone chips. At $35-$45 gross per chip, they only make a few dollars in profit.
A high end i7 processor probably achieves profitability in the $700+ per chip sold range.
That means they need to sell roughly (round numbers) $700/$5 = 140 smart phone chips to make the profitability from one high end computer chip.
No one is going to try to compete with AMD/Intel on the high end since there just isn't room for a competitor and the R&D risk is too high.
For Intel, they need to get in phones and tablets for the extra profit because they can, but there isn't that much there.
Whether Otellini has done the right thing or not is yet to be seen, but I would bet that Intel will start getting design wins in the next few years and will eventually become the dominate phone processor seller.
You have just stated the Innovator's Dilema, and nothing Intel is doing appears to be any different than anybody else who has been displaced has done. Waiting for the profits to get "large enough" simply gives the entrant time to solidify their base.
Intel isn't going away, but it's going to have some rough times.
Comments
Intel hasn't missed the boat on tablets or phones, they will be there shortly.
It takes years to design and tool a fab to build a new chip. Intel started the R&D process years ago to maximize battery life. But, soon they will be in lots of phones and tablets.
The part of Intel/SoC/iPad/Tablet/Phone world that people don't understand is that there is almost no profit in making low end phone chips. At $35-$45 gross per chip, they only make a few dollars in profit.
A high end i7 processor probably achieves profitability in the $700+ per chip sold range.
That means they need to sell roughly (round numbers) $700/$5 = 140 smart phone chips to make the profitability from one high end computer chip.
No one is going to try to compete with AMD/Intel on the high end since there just isn't room for a competitor and the R&D risk is too high.
For Intel, they need to get in phones and tablets for the extra profit because they can, but there isn't that much there.
Whether Otellini has done the right thing or not is yet to be seen, but I would bet that Intel will start getting design wins in the next few years and will eventually become the dominate phone processor seller.
You have just stated the Innovator's Dilema, and nothing Intel is doing appears to be any different than anybody else who has been displaced has done. Waiting for the profits to get "large enough" simply gives the entrant time to solidify their base.
Intel isn't going away, but it's going to have some rough times.