back to article Huffing and puffing Intel needs new diet of chips if it's to stay in shape

My web browser ate my homework. I spent nearly two hours typing an analysis article on Intel's latest financial figures into our intranet thing when the browser tab unexpectedly refreshed and I lost everything. Hadn't saved. Moron. So let me start again and get to the point: the nosedive in sales of personal computers around …

  1. Andrew Hodgkinson

    The unbridled greed of the MBA's New Normal

    1-2% drop over the entire year with 55 *billion* dollar revenue and earnings per share over two dollars regardless.

    "Plummets".

    Yeah. OK. Whatever.

  2. inmypjs Silver badge

    "Microsoft dishing out free copies of Windows 10 to people hasn't helped..

    – most normal people buy a new machine to get a new OS".

    Most normal people don't want to get Win 10, it is a reason *not* to buy a new machine (unless its a Mac).

    1. Paul Crawford Silver badge

      Re: "Microsoft dishing out free copies of Windows 10 to people hasn't helped..

      Most people don't want a new OS, or a new PC, as such: they just think its a way to stop the current one sucking so badly.

  3. James 51

    I got an A6-5400k about two years ago. It does everything I need, even some modest gaming. Same for my Q10. The microphone needs to be replaced but it's fast enough for everything I need. If you're editing 4K video or playing games at 4K you are going to be pushing the power/performance envelope as far as you can but for people can make do with that they already have until it breaks. This is the real reason I think that laptops take up more shelf space in show rooms than desktops and phones are sealed with difficult to repair components. It's the new built in obsolescence.

  4. Anonymous Coward
    Anonymous Coward

    Surely another reason that people would buy a new PC is that it would be significantly more powerful than the previous one. But this isn't really happening any more thanks to Intel's insistence on wasting the advantage of smaller geometries by just adding more and more transistors to their existing core designs to squeeze just an extra few percent of compute power out of them. Slim down the cores and give us lots more of them (so basically a Xeon Phi but at a sensible price), and stop pretending you can design graphics controllers while you're at it and replace them with more cores too.

    1. James 51

      Would you rather be the person who launched the 'Newest, Fastest, most Powerful CPU in the World' or the one who launched 'Same Power but Smaller and uses Less Electricity'. The current policy nets narrow gains to be sure but it’s what Intel knows best.

      Once AMD launched their APUs Intel had to respond in kind or risk losing a lot of the cost conscious budget market to AMD which required one less component and simpler motherboards.

  5. Anonymous Coward
    Anonymous Coward

    history

    > Slim down the cores and give us lots more of them (so basically a Xeon Phi but at a sensible price), and stop pretending you can design graphics controllers while you're at it and replace them with more cores too.

    Larrabee?

  6. John Smith 19 Gold badge
    Unhappy

    Oh dear Intel are not making as much profit as they are used to

    And I care because?

    Intel owes it's supremacy on the desktop to MS and vice versa. While MS still has the death grip on the file formats PHB's insist have to be used (because they can't figure out how to override the defaults and open real open source standards) they'll be alright.

    But if you're doing a clean sheet build of a new software system and you don't give a stuff about it being "Intel inside".....

    1. Mage Silver badge
      Facepalm

      Re: Oh dear Intel are not making as much profit as they are used to

      IoT and Toys?

      No, that can't help Intel with their high margin power hungry chips. An ARM SoC can be be as low as 50c and run on a few AA cells all year.

      Of course Intel does have great fab, great marketing, great production engineering and an ARM licence. Even after selling the StrongARM based range to Marvell, they did keep an ARM based comms controller.

      It's not a matter of new markets for x86-64, those don't exist, but a matter of changing the philosophy of how they make money and from what. Ego.

      1. druck Silver badge

        Re: Oh dear Intel are not making as much profit as they are used to

        I don't see much demand for $1000, or even $100 a piece processors in IOT land.

  7. Ardag-II

    Really, selling the same cpu for 5 years makes you wonder why sales are dropping?

    Since sandybridge they have been selling the exact same cpu and sales dwindling is a shocker? Everyone I know has a i5-i7 cpu. There is no1 left to sell to, except dell and hp users which get their laptops burned every 2 years. This is AMDs fault for not competing with intel and letting them get lazy. The only laptops and desktops I still get so see on the core 2 architecture are work computers. Just rollout the new architecture and leave the Iot market alone cuz u have 0 chance to compete there. Iot is about price and power consumtion and in the price department intel is lightyears to expensive. Intel making boards with a price range from 5 to 35 bucks, hahaha so funny, tits up in 10 sec

    1. Steve Todd
      Stop

      Re: Really, selling the same cpu for 5 years makes you wonder why sales are dropping?

      I'm not an Intel fan, but even I know that they have been making improvements to the performance and architecture. The i5 from 5 years ago isn't the same as the current i5 (they are fabbed on a different process, use less power at a higher clock speed, have better on board graphics and execute more instructions per clock cycle). Core i is a brand not a design.

  8. Torben Mogensen

    Different economics

    PC and server processors have typically had a high unit price and, hence, a high earning per unit. This is the market Intel has mainly succeeded in. Processors for IoT need to have a very small unit price, which means lower earnings per unit. Intel has previously had some success with 8-bit embedded processors, but they are being pushed out of that market by low-end ARM cores in highly integrated SoCs.

    Intel has traditionally not done SoCs. One reason is that no single SoC fits all purposes. ARM handles that by licensing: A large number of different companies make an even larger number of different SoCs by integrating their own peripherals around ARM cores. Intel doesn't license its cores.

    So if Intel wants to get into the IoT market, they should start licensing. The x86 platform probably has too much complexity baggage to compete effectively against ARM in that market, so Intel should design a simple 64-bit microprocessor that they can license to SoC builders.

    Alternatively, Intel could gets its income by fabricating processors from other companies on its foundries. Intel has pretty good fabrication technology, so if it can't compete on processor sales, it might very well compete on chip fabrication.

    1. Duncan Macdonald

      Re: Different economics

      Intel cannot get the profit margin it expects (of over 50%) in any area where it has real competition. Fabbing chips for other companies will be unlikely to produce returns over 10%. IOT chips are unlikely to give returns of over 20% due to the competition from ARM based chips.

      Current Intel desktop chips have hardly increased in performance over the last few years (the 6700k is about equal to the 4790k and only a few percent faster than the 4770k which was released 2 years earlier) and as a result there is very little incentive for users to upgrade systems. (ARM based chips however are increasing performance at a much higher rate.)

      1. John Smith 19 Gold badge
        Unhappy

        Re: Different economics

        "Intel cannot get the profit margin it expects (of over 50%) in any area where it has real competition. Fabbing chips for other companies will be unlikely to produce returns over 10%. IOT chips are unlikely to give returns of over 20% due to the competition from ARM based chips."

        Interesting.

        On this basis Intel's problem is neither it's technology nor it's products.

        It is Intel's sense of entitlement. There expectation they can charge that kind of markup in areas where there are substantial competitors already in place.

        Intel's core skills are making chips. They make the best Intel processors on the planet. Logically they should leverage that and start making the best ARM chips on the planet.

        But until they get over themselves that's not likely to happen.

        What's clear is sometime in the next decade we'll be down to the 1 atom FET and at that point everyone's technology will be on a level playing field.

  9. knarf

    Why Buy Intel Chips

    Really why buy and intel chip when you can License an AMD for pennies and you can customise that chip as well to exactly meet your needs. Intel has to get over sell things and instead get it head round selling IP.

    They want to get into IoT, first sell or give aways a $3 board like a Raspberry PI and provide REAL tooling for free for that board, that also mean tooling like Tina, development environments, OS and lots of other stuff. It will NOT take 18mths it will take years and will be a long slog.

  10. Youngdog
    Headmaster

    "I spent nearly two hours typing an analysis article on Intel's latest financial figures into our intranet"

    Oh dear. As any fule kno you must always always type it out, in full, into something far more stable than a browser window if you want to avoid pulling your hair out in clumps before keeling over with an aneurysm. I use notepad just to be sure.

  11. Charlie Clark Silver badge

    Gartner gets it right?

    Milk the data centre market for all its worth until the IoT market somehow develops just as Intel needs it? Even for Gartner that's a bit simplistic.

    Sure the data centre market has higher margins but is it going to continue the way it has for the next five years? Will there really be no serious competition?

    "Next year will be the year of ARM servers" may have been the call for a while now but the 64-bit chips are finally starting to appear and, even if Intel now has silicon for some of the low-grunt tasks that ARM is particularly suited to, it will still have to compete there on price. Something it doesn't have to do as much in the x86 area. Sure, recompiling for ARM does add a bit of a hurdle for some systems but, outside the GUI world, there is little software that can't be compiled on ARM.

    As for IoT, well ARM is already pretty well-established in many manufacturers so Intel has a lot of work to convince people that it's worth paying more for their silicon. OTOH there might be more value in providing a reliable eco-system for developers.

  12. John Robson Silver badge

    IoT

    Doesn't that really mean more data centres for all the centrally accessible personal data hidden behind the password: "Password123"

    1. Charlie Clark Silver badge

      Re: IoT

      What IoT systems do you know have passwords longer than 8 characters? ;-)

      1. John Robson Silver badge

        Re: IoT

        "What IoT systems do you know have passwords longer than 8 characters? ;-)"

        None - but my point was more directed at the more data centres than the password...

  13. Binesh
    Pirate

    Intel & ARM

    One thing that is not mentioned a lot is that Intel has DEEP pockets through their monopoly in the data centre as well as PC market. They will p̶u̶s̶h̶ (buy) their way into any market they want to. Just look at the amount of money they poured into the tablet market to win designs but ultimately have failed to make a dent in sales. Will they succeed will depend on if they want to earn lower margin/high volume or charge an ARM and a leg for funky whistles that nobody needs (a la VPro anyone?)

    Also with ARM you can go to whoever makes the ARM widget that you want whereas Intel will make a small number of variations with Intel IP in everything and expect you to pay for it and that will be the only game in town.

    Note that the same people who currently churn out PC's and their ilk will also be in the IOT market and they will gladly take the Intel marketing funds if they can as they are so addicted to this to keep themselves solvent.

  14. tempemeaty
    Stop

    Solution

    Create a new PC market.

    How?

    "Stop Depending" on another company to do it for you.

    How?

    Replace Microsoft = Profit.

    ¯\_(シ)_/¯

    1. P. Lee

      Re: Solution

      >Replace Microsoft = Profit.

      Actually, that's incredibly dangerous for them.

      Intel supporting Linux seemed like a great idea at one point except that Linux is open source and can be compiled for non-Intel chips. The more open source software is out there, the greater the market for non-Intel chips.

      What Intel do well is being the technically "best" PC chip - the most power-efficient or the fastest.

      That earns Intel a place in laptops and data centres. AMD do well in purchase-price-sensitive markets where electrical efficiency isn't much of an issue.

      Sadly, we're not really seeing much in the way of feature innovation. What we really want is to see is more features. How about enough hypervisor hardware that we don't need to emulate any x86 in software to get a VM? Create an initial-boot hypervisor hardware partition which can then spin up hardware-enforced VMs. How about easier allocation of PCIe devices to VMs?

      I don't think IoT is where Intel need to be, but they could (and I think should) snag a chunk of VMWare's high-value business if they put their mind to it.

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