Intel Lost Over $4 Billion On Mobile Last Year

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Grognak

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Is that supposed to be surprising? Everyone knows Intel offered their Atom chips for dirt cheap in an attempt to stop AMD from entering the tablet/phone market. They've never made a profit from it and they don't care, as long as AMD loses even more.
 

salgado18

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By paying companies to use its chips on devices, Intel is doing the same thing it did to AMD a while back: gaining market share using pure financial power. Intel was charged with monopoly, and had to pay AMD a bunch of cash because of it, but the damage was still done. Now it's doing it again. I might be wrong, but isn't that illegal?
 

everlast66

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I am glad Intel lost such a great chunk, $4B, of their hard earned $11B profit with this false economy strategy that isn't contributing anything to the market. I am sure big shareholders are breathing in the board's directors' necks and hopefully will stop such nonsense next year.
It's much more reasonable to spend such funds for R&D and put a better product in the market, rather than subsidizing prices to get inferior products into customers hands.
When a company starts spending like this, something with it is going seriously wrong and alarm bells start ringing ...
 

salgado18

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I don't think investors will find that bad. You see, in 2013 Intel shipped 10 million tablet processors, and in 2014 around 40 million. Now that they have a presence, they can take some of the subsidy away, start earning a bit more, and still ship quite a bunch of processors, because the products with Intel Inside were "successful". They bought market share, cold blooded, outmatching anyone on cost/benefit. That's why AMD couldn't compete (that makes me so mad), and that's a serious threat to slightly less powerful ARM chip makers.

Edit: god, this comment system is terrible :/
 

Brice McIntosh

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How does this strategy work? Doesn't enabling OEMs to sell devices at much lower costs now make it harder to sell devices with the same relative performance down the road harder to swallow for consumers? If I can get a Nokia N1 today for $250, Why would I pay $350-$400 for an N2 in a year or two? I expect that once Intel stops paying people to use their chips, the products using their chips will cost considerably more.
 

none12345

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"I am glad Intel lost such a great chunk, $4B, of their hard earned $11B profit with this false economy strategy that isn't contributing anything to the market. I am sure big shareholders are breathing in the board's directors' necks and hopefully will stop such nonsense next year."

No, they had 11 billion profit after that loss. So they lost 4 billion of a 15 billion profit, leaving 11 billion.

But....they didnt lose anything. Its by design. Its the same thing they did to AMD in the the year 2000. It worked before and as long as they have the cash to do it for awhile(which they do), it will probably work again.

From that point of view, i think the shareholders are fine with it. If the market ONLY bought bet best tech for the dollar, Intel would be a much weaker position today then it is. It can afford to get its product everywhere, and that keeps it strong.
 

InvalidError

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Does AMD have any SoCs competing against Intel's Atoms in the neighborhood of 2-3W TDP? No. Intel cannot drive AMD out of a market AMD has no products for.

The Android market is dominated by $15-35 SoCs. If Intel is failing to grab a decent market share despite its architecture, fab process, power efficiency, marketing, engineering muscle and other advantages over AMD, AMD's chances of entering the mobile SoC arena with x86-based chips are very low. With the amount of competition in the low to mid-range ARM-based SoCs, AMD would likely have a hard time entering the mobile ARM market as well.

Most mobile device designers/manufacturers are simply not interested in x86 beyond what Intel's R&D funds will cover. This reluctance would not get magically better for AMD even if Intel suddenly ceased to exist.
 

MyDocuments

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As someone has already pointed out, Intel expect to be able buy a presence in the Mobile market, and then start the price hike whilst claiming premium prices for their premium performance. This of course can only happen when they hand in hand with their silicon expect to provide software and services that can only run on their devices and so put other architectures and their vendors on the wrong foot (Qualcomm, Samsung, Mediatek, Spreadtrum, etc).
We must remember the big picture in that Intel will eventually expect to own the whole vertical platform, from the handy/tablet in your pocket/bag to the server infrastructure at the back-end doling out the special Intel-only (or even Intel-improved) services.
As far as I remember former Intel executives were also on the boards of service companies, like Google for instance, and we should perhaps look into how far this spreads and how these boards are steering the technology – doubtless there is a matching paradigm of the stories of elected officials being lobbied by big-business here, and all of it self-serving and not in the public interest.
Nevertheless, I would expect this would be how Intel would eventually crow-bar the Apples of this world into giving up their hard-won custom ARM cores.

Hopefully, most people will start to see sense and stop buying over-the top pretty-baubles that are the premium priced products and realise that what they in fact need is something good-enough for their intended use. Should this “good sense” prevail then we can expect to continue to see the products that we have now at similar prices in the future without too much of the Intel inflation that the company enjoys in the mid to upper PC-chip market.
In short, get them while they're good and cheap but try not to rely too much on any tie-in services and software.

Of course, the one known market area where this “good enough for the purpose” mentality has been successfully shuttered is where Apple have cornered the “Bling” market, (Bling in this case representing the so called “fashionable to be seen with” item), but there are already defectors in this camp that see the price as too high for what is offered. Doubtless many of these people will argue about the Apple use-ability, services and quality, which could be a good thing in that it should help raise the bar for the competitors similar offerings, but in the meanwhile, meh... whatever. These people will continue to want what they want at the prices they pay, so buyer beware! [It is perhaps also in part due to these people that the high-prices of other manufacturer's premium products can sometimes reach similar levels to those of Apple's].
 

blitzen666

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HAHAHAHAHAHHAHA........................

I will never buy an Intel anything ever.

Back in P-4 days I was a CAD Draftsman & my AMD machines at homes were the cats meow. ANytime I was contracting & on a P-4 in ACAD, push a menu button & wait 5 seconds, for everything. My AMD 64x2 was instant.

I will never forgive Intel for YEARS wasted in bad environments working on crappy equipment.

Supporting Intel for any reason is a display of moral depravity.

My Phenom-II 965 is running better every year & w/ my r9 270 BF4 looks as good on my machine as anything I have seen on netflix.

AMD should buy Radio SHack & market Hi quality gaming (and CAD etc) laptops for cheap, STEAM them.

After reading Toms since the begining, this news made me laff enuff to register!!
 

danbfree

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You can't blame Intel for trying to get a nice share of the mobile market... obviously with desktops dropping in market share they need to make some ground up here after a late start... the latest Atoms are excellent processors, but will people be willing to pay a premium when they can find application appropriate performance for less? Will Intel at least turn to making a small profit soon in this area? We shall see, but we will have to dig through their "desktop" earnings to try to figure it out now.
 

SirTrollsALot

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I just bought 1000 shares of AMD stock dirt cheap today at $2.35 a share just think if it hits $5 or maybe more by year end... If it goes down oh well if its meant to be its meant to be...
 
blitzen666,
So you are boycotting Intel's superior desktop CPU's partially because you had a bad experience years ago with Intel?

So now you are determined to stick with AMD who now has the inferior product?

That's odd logic.
 

blitzen666

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Photonboy,

3/4 of the computer users in the world were screwed for years, yes i am still pissed.
When designing anything over 1/5 second delay screw ur train of thought. Those P4 took like a Mississippi to open the osnap box, by noon I was burned out & still had to look busy till quitting time.

They are doing the same thing now, why support them?

AMD FX 8XXX & 6300 are more than good enough, hyperthreading does not work in Chief Architect or anywhere other than Photoshop.

Goto Tek Syndicate & a few russian site that are not schilling for intel, new games are running best on 8 core AMDs .

it takes $1000 dollar Intel chip to best 8350,8370 in heavy duty multi threaded tasks.

With the $850 I save I can get a lot of Monitors, drives, ram & have a system that will not burn up in 3 years.

Yup I will stick with my AMD junk.

I also have 2 old athalon 64x2 that have been running 24/7 for ten years & they are still as good as new. (Netflix & internet & ancient games boxes, 45 watt cpu's).

Explain to me what job or task do u do that INTEL's over priced over rated stuff is required.
 

Reepca

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*remembers what was learned in Honors American Studies Freshman year in High School about trusts and anti-trust legislation*

Guess we haven't come very far at all. It's a very simple idea - sheer brute money lets you beat out the smaller guys, and when there aren't any small guys to challenge you, you sure do make a fine amount of money.

Monopoly was a much happier term way back when I thought it only referred to the game.
 

MyDocuments

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Hmm, there's another article on Toms about Allwinner (whose A10 & A20 chips are used in the RPi-like Cubieboard and BananaPie) who are challenging the mobile space with a $5 quad core 64bit ARM architecture chip. The article makes a lot about the particular challenge to Intel, however Intel are (still) working towards integrated modems on their chips in order to catch up with Qualcomm but I don't see Allwinner offering a integrated modem, that would cost extra, so maybe the threat to Intel is not so bad. Competition is a a good thing but we should compare apples with apples, despite all of the different varieties.
The discrete modem market is also thinning out, last year we saw the demise of Broadcomm and Ericsson's mobile-modem divisions, as well as the Toshiba/Hitachi/ST consortium whose name escapes me. This could lead to the integrated-solution vendors (Qualcomm and soon Intel) to both charging a premium and less choice, hopefully Samsung, Mediatek and Spreadtrum will be able to address this and thus keep prices lower.
 

rokit

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Well, Intel is a big boy but it surely like to play dirty.
Somehow people in comments added AMD here for no reason really.
Its Intel problem to swallow its pride and pay for ARM license to use that cornered it. AMD being way smaller company obviously licensed ARM as soon as possible and going by their plans they will start using it extensively but Intel for some stupid reason won't.
It was Intel who GAVE AWAY ARM in the first place. But that fact shouldn't cloud the decisions of its heads in a company. Its their own fault from the beginning to nowadays. Intel is to stubborn to deal with it so they'll try to break through with any method they can.
 

Haravikk

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I think the biggest problem is the delay to Broadwell; it's really the first chip IMO that has the potential to make it big in the mobile space, but it's just been too badly delayed at this point, which means the advances to follow aren't likely to come soon either.

With the lower thermals they could do really well, but it can't happen till the parts are available :)
 

InvalidError

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Entering the crowded ARM chip market would not have any benefit to Intel: it may make it easier to grab some market share but their profit margin would still be slim to none unless they can manage to beat established ARM players at their own games. Intel could probably pull that off but due to all of the other ARM designers on the market, they might not be able to command premiums large enough to justify the effort.

The bigger danger for Intel is cross-platform OSes and platform-agnostic applications (ex.: Android, ChromeOS, FirefoxOS, etc.) becoming the norm even on the desktop, eliminating most people's dependence on x86: most of Intel's profit comes from the large margins on their desktop/laptop x86 chips. If Intel becomes "just another vendor" in a largely platform-agnostic world, it directly erodes their ability to mark prices up.
 

armitageid

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Using some of the information others have provided above I think their strategy is working. They lost $3.1 billion shipping 10 MM Tablet CPUs in 2013 compared to a loss of $4.3 billion shipping 40 MM Tablet CPUs in 2014. Looking at it like that, they are definitely making forward progress. They shipped 4x the number of Tablet CPUs while only increasing their losses 1.39x times. That means it is costing them less the more they are getting into the mobile market.
 

gdunning86

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I guess I'm the only one who notices a real world difference in the products between ARM, Intel, Temesh, and the Apple chips. The reality for price right now is Apple vs Intel. You can spend $500 for an Ipad Air and get their store and OS, which no matter what anyone says, is incredibly easy to use, and works for a long time for the majority of consumers. Or, you can pick from a variety of Android and Chrome devices, doing practically the same things, with a little more difficulty despite the custom options, for the same price with the equal speed from ARM and Temesh processors, or buy the Intel version for $100 (or more) less. If the prices shift up then logically we have a more competitive market, but Intel is clearly doing the logical thing in spending money for market share now.
 

Avus

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It is not illegal because Intel is an American company, and a powerful one. But if other non-American companies use low price strategy in America, US company/gov will sue them for anti-dumping. It is the American way. (google DRAM anti-dumping again Korean manufacturers in 90s.
 
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