Monday, December 3, 2012

ARM's disruptive technology.

Whether you realize it or not, most of your computing is now done using the ARM-based computer chips.  Until a few years ago most of your computing was done with Intel CPU chips (or copy-cat chips from AMD or VIA).  This is the computer architecture used by Windows and Apple desktop and laptop computers. With the rise of the cell phone and then tablets, ARM-based computers now out number Intel-based ones.  Most people use these new small computers more than they use Intel-based ones.  In fact, everything a normal user does (especially if you have a keyboard dock) can be done on a tablet (or a phone if you have a keyboard and larger display dock). There is likely some missing software still, but it is at least possible for it to be written there.

To be clear, in server situations and in workstations (high-performance desktops) Intel is clearly still king, but in terms of most user's normal usage, they use ARM more than Intel and really do not have needs beyond what can be provided by ARM.

You can read a good story with nice graphs about this here. The story has data only through 2011, but 2012 continued the trend.

The rise of ARM is extremely disruptive to the Computing Industry.  In future posts, I'll cover more of this in depth, but for the moment let me say that Microsoft, Intel, AMD and Apple are all endangered by this disruptive move to ARM.  But wait, I said "Apple"?  Didn't they start much of this trend?  (Actually they didn't start it, but they did do a lot to popularize it with iPhones and iPads.)  Yes, Apple is very much endangered by their own creations.  In mid-late 1980s Apple popularized the GUI, creating very nice but expensive computers, much as iPhones and iPads are now. Innovations in chip technology and other computer parts drove prices steadily downward. Microsoft Windows 3.0 came out and provided "good enough" software that worked on this ever-cheaper hardware.  Apple continued to pursue their high profit margin approach and nearly died as a result.  More details on this story can be found at on this Wikipedia entry. They are going down the same path with the iPad and iPhone.

ARM chips are very cheap, the currently shipping high-end Exynos 5 (in the Google Nexus 10 tablet) is around $20. Intel chips are significantly more expensive, with the chips found in most desktop and laptop computers costing in the $100-$400 range.

Two years ago, ARM chips were still enough slower that they were not a serious threat to the Intel-based industry and many still were not using smartphones.  But things have changed.  First of all more ARM devices were shipped than Intel ones. Second, ARM chips are now at low-end laptop speeds. Finally, several free open source operating systems (most are Linux-based) are now "good enough" that you do not need a company like Apple backing the software.   The best known of these is Android (and indeed Android has left iOS in the dust on phones and made great strides with tablets), but others include ChromeOS (also started by Google), WebOS (recently made open source by HP) and MeeGo. There are many others, but these are biggest in the news at the moment.

So here's the problem in a nutshell:  ARM processors cost $20, Intel processors cost $100+.  The open source software costs zero (actually, the OEMs tend to support the projects financially, so let's think big and say $2 per device), Microsoft software costs about $50 per device (Apple uses it's own software, but I think it is fair to say it costs them significantly more to develop than $2 per device.)  How long before this cost differential has an effect?  Well, now!

Let's take a look at's current top 20 from its Computer & Accessories Best Seller List:
(I have removed 3 Wifi routers and 1 monitor as they are a different sort of device. These may have contained ARM chips, as ARM chips are used for more than general computing devices.)

At the time I'm looking at it, it reads :

1.Samsung Chromebook (Wi-Fi, 11.6-Inch)
2.Samsung Galaxy Tab 2 (7-Inch, Wi-Fi)
3.Samsung Galaxy Tab 2 (10.1-Inch, Wi-Fi)
4.Coby Kyros 7-Inch Android 4.0 4 GB Internet Tablet 16:9 Resistive Touchscreen, Black MID7034-4
6.Google Nexus 7 Tablet (16 GB)
8.Apple MacBook Pro MD101LL/A 13.3-Inch Laptop (NEWEST VERSION)
9.Asus Google Nexus 7 ASUS-1B32 32GB Tablet - Quad-core Tegra 3 Processor, Android 4.1
10.Apple iPad 2 MC769LL/A Tablet (16GB, WiFi, Black) 2nd Generation
11.HP Pavilion g6-2218nr 15.6-Inch Laptop
13.Blackberry Playbook 7-Inch Tablet (32GB)
14.Fuhu NABI NABI2-NV7A 7-Inch Tablet
15.Coby Kyros 10.1-Inch Android 4.0 8 GB 16:9 Capacitive Multi-Touchscreen Widescreen Internet Tablet with Built-In Camera, B...
16.Apple iPad 2 MC979LL/A Tablet (16GB, Wifi, White) 2nd Generation
17.Coby Kyros 7-Inch Android 4.0 4 GB Internet Tablet 16:9 Capacitive Multi-Touch Widescreen, Black MID7036-4
18.7 Inch Android 4.1 Jelly Bean Capacitive Multi-Touchscreen Widescreen 8GB Internet Tablet Dual Core 5 Point Touchscreen &...
20.Chromo Inc® White 4GB 7" Android 4.0 Touch Capacitive Screen 1.5ghz 512MB RAM, 4GB Harddrive Tablet Pc Wifi 3g Camera Tr-a13

So what do we see:
  • 16 of the top 20 are computing devices.
  • 14 of the 16 use ARM chips
  • Only 1 uses an Intel chip (the HP laptop uses a chip from AMD).
  • There are 3 notebook computers, the Chromebook is ARM based. The other 2 (an Apple Macbook and an HP laptop) are low-end for their category.  There are no desktop systems of any kind.
  • There are 2 entries for iPad 2s... not Apple's new 4th generation.
  • 10 of 20 are Android tablets ranging in price from $74.99 to $429.95.  All cost less than iPad 2s and much less than the 4th generation iPads.
  • There are 3 Android tablets listed that are priced sub-$100.
  • The number 1 best seller, is a Chromebook, a laptop that only runs the Chrome browser and has very good security features.  This laptop (which is ARM-based) costs only $249.  It is lightweight, has 6.5 hour battery life and HAS NO FAN!  It sells out as fast as it arrives.  This is true on Amazon, Best Buy and Google's Web Site.  It features the Exynos 5 ARM-based processor. It is faster than most of the Intel Atom chips used in the lowest end of laptops.  This only became available a little over a month ago.
  • Remember this is during the Christmas selling season, a time when consumers do much of their computer buying.
  • The rankings above vary over time but the overall profile has been like this for at least a month.
What seems clear to me from this is that people are extremely interested in devices that are:
  1. Inexpensive.
  2. They are not concerned with fancy features, so long as the device does what they need.  This is bad news for the makers of expensive systems, especially Apple as they only make expensive systems.
  3. Web browsing over Wifi is probably their most important concern (3 of 4 of the accessories I omitted were Wifi routers, every device above has Wifi and web browsing support).

ARM related problems for Microsoft, Intel, AMD and Apple:
  • Microsoft: They have done so badly with Windows 8 and tablets I'll do lucky to even scratch the surface in a separate post.  For a quick taste of what's to come: they are charging OEMs the outrageous price of $80-$90 to use Windows RT on ARM. Microsoft thinks their very cut down version of Office, which you are not allowed to use for business purposes, makes it that valuable.  In a world of $200 tablets, an $85 surcharge guarantees failure.
  • Apple: The Google Nexus 7 can be bought from Google for $199 now.  Given the rate of change in ARM hardware, by next Christmas one would expect a similarly spec'ed tablet to cost $100-$150.  This tablet is very powerful and would meet the needs of most people, though some might want to opt for a 10" model... should be available next Christmas for $50 more.  Apple charges $29 for its new Lightning connector converters... how will they ever compete at this price level?
  • Intel: Their attempt to compete in the phone market, Medfield, not a total flop but is not really succeeding.
  • Intel: Their attempt to compete in tablet space, Clover Trail, is late.  The best available benchmarks show it is likely to be significantly less capable than the Exynos 5. There are rumors that Clover Trail is relatively expensive to ARM, but I cannot locate firm figures.
  • Intel: The next line to try and compete is Haswell.  Haswell has high-end laptop level performance with (supposedly) ARM-level power consumption.  However, Intel is living in a fantasy world when it comes to pricing it at $275.  I've seen another number that is lower: $184.  The difference could be list price vs. real price. Those prices are for the low-end chips.
  • Intel:  ARM just keeps improving:
  • Intel: By the end of 2014 ARM is likely to have chips good enough for any mainstream laptop or desktop.  It will be making significant inroads into the server market as well.
  • Microsoft:  The operating system of choice on ARM-based servers is Linux.
  • AMD is switching to making ARM devices, but is it too late?
    I find it impossible to believe that Microsoft, Intel, AMD and Apple will survive unless they undergo tremendous changes, including complete overhauls of their corporate cultures.  Their core products are undergoing a 4-fold drop in value.  (Apple products in tablet/phone space are probably only 2x overvalued.)

    Microsoft and Intel have other product lines that will keep them around for quite some time, but stand a good chance of becoming irrelevant in client computing. They will likely suffer a quick stock price fall when investors realize the situation, then diminish over time. Intel seems to me to have the better chance of turning around, but none of their new attempts at mobile give me confidence that they can actually do this. I have little hope for AMD.  Apple is the enigma, nobody HAS to have anything Apple makes, so it could die quickly.  On the other hand they tremendous experience in the new market, so they are probably the easiest entity to turn around.  They also have the biggest horde of cash. Their media contracts (Music, TV, Movies) are the best around.  However, their cloud infrastructure is plagued with problems and shortcomings.  Their corporate culture is very much against them doing well in a low cost world of computing.

    1 comment:

    1. Wow! Great article, a low cost computing world with open Linux systems seems like where we're headed. All these legacy platforms are going to have a rough time. Way too closed and honestly slow to react to the fast paced progress of mobile computing.


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