Back in December, I wrote that
needed to buy
if it wanted to
I noted that ARM owns the mobile Internet device, or MID, space. It owns 95% of the mobile phone market and 85% of the smartphone market in unit shipments.
I also noted that there are too many leading semiconductor companies licensing ARM products for Intel to make inroads. ARM processors are being manufactured in the best semiconductor facilities around the world. Companies that are currently or formerly ARM licensees include
Now there are rumors that
will buy ARM. The valuation of ARM by one estimate is $8 billion. Apple has about $25 billion in cash while Intel has about $16 billion, so both are cash rich. An ARM takeover by Apple doesn't make sense to me, but it does serve as a wake-up call to Intel. If Apple doesn't buy ARM, and most likely it won't, how many other companies are out there with deep pockets that may do just that?
Projections of netbook sales, the majority of which are run on Intel's Atom, are being revised downward with the introduction of Apple's iPad, which uses the ARM chip. Intel stands to lose revenue growth as the "netbook killer" continues to cannibalize netbook sales.
I am certain Intel, which has a close relationship with Apple, tried to push for the Atom to be the CPU of the iPad. Intel hopes to counter the drop-off in netbooks with the
Slate, which uses a 1.6 GHz Atom processor. How many netbooks will be cannibalized is conjecture at this point with the iPad on sale for less than a month. How many HP Slates will take up the slack in netbook, and hence Atom sales, is also conjecture. Why go through all the calculation when the answer is simple? If Intel buys ARM, it doesn't matter. Intel will make money whether it's an Atom or an ARM that goes into any MID device.
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Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.