The Portland suburb of Hillsboro, where all Intel’s high end product operations – and its main cash cow – are located, was unusually hot for this time of the year, with temperatures almost touching 30 Celsius (90 Fahrenheit) some days.
So was Intel inside (pun intended), overheated in preparation for the imminent launch of new workstation, server and, yes, high-end desktop Haswell flavours that will have a public debut before the September IDF opens its doors. These were already well written about by many in the media community, so this time it’s pointless repeating what’s already widely known.
What is interesting is where Intel would go from here. Will the company focus on the Xeon and related enterprise and high end client products which do bring in the high-margins? Or get embroiled deeper in the fight for the current fad of the day, the “all-popular but hard to make money” ultra-mobile gadgets?
The situation in the two markets can’t be more opposite: in the first, Intel’s Datacenter Group is an absolute industry leader, with the estimates of its market dominance hovering around, or above, 90% — of the highest-profit market in the general IT hardware space. After a bit of lull few years ago, the product launches are again on a yearly basis, keeping the tick-tock regular. Aside of increasingly hungry – perhaps vengeful – IBM with its global promotion of POWER8, there are no real global competitors in this space at the moment, performance-wise or presence-wise.
Intel as the underdog
On the other side, in the highest volume, but questionable margin, ultramobile space, with its plethora of smartphone and tablet offerings, Intel was, and still is, an underdog. Maybe it is in a worse position than AMD was versus Intel in the x86 space a decade ago, or that Alpha and MIPS were versus x86 fifteen years ago.
At least, during those respective times while trying hard to enter the main arena both of those competitors had their protected niche markets where they ruled — while it all lasted. In both cases, it was based on the combination of performance and feature advantages and customer base loyalty, at least for specific apps where Intel couldn’t match those competitors then.
Compare it to today’s ultramobile battlefield. Intel has sunk enormous resources, both financial and manhours, in getting into that almost totally ARM-dominated market. Over the past few years this seriously affected its balance sheet in the process. But Intel, like others, had its protected market: the high-end server side fund their low-end ultramobile peers. Yet, despite fairly good performance of its Atom-based mobile offering – in quite a few cases these measurably outperform their ARM competition – and huge investment in Android apps porting, the results are still only trickling in.
Let’s go back in time to a period when Alpha and MIPS had even greater comparative performance advantage over the x86 in their respective heyday.
At the high end, that extra performance mattered much more than in a smartphone, whose primary functions should, after all, be calling and texting. But the companies behind them, while not small by any means, still couldn’t handle Intel marketing competition and lack of will by other partner vendors to fully support them. So, at least outside China, they failed.
Now, Intel faces a “central committee” of all-powerful global vendors like Samsung, Huawei, Nvidia, Apple, LG and, of course, Qualcomm, all working with the little ARM Plc, to push ARM forward.
Now ARM is hardly the best architecture around. In fact, if you really wanted to find something worse in performance, architecture and scaling than the x86, ARM and SPARC are the only real candidates, aside of the “good ship Itanic.” An architecture originally designed for a low-end desktop PC (see: BBC Micro) and embedded apps, never for high-performance computing, can in reality only stay within the ultramobile space unless major, major changes are made – which impact the now “golden” compatibility with the past apps.
After all, it took ARM nearly 30 years – from 1985 “Acorn RISC Machine” to 2014 Cortex-A57 – to have a proper 64-bit processor, while MIPS and Alpha were fully 64-bit in 1990 and 1991, respectively. Even the x86 has now over a decade of 64-bit existence.
And yes, those ARM alliance vendors fight each other like nobody’s business every day – they are each other’s worst enemy. However, Intel’s entry would unite them all against a “common enemy” who should not be allowed a chance at the dominance, at least not the way it has in the PC world.
Does Intel need an exit strategy?
Even with shareholder pressure of the “my daughter’s iPad doesn’t have Intel Inside: fix it or you’re fired!” sort, the question is how deep Intel should go into the smartphone and tablet quagmire?
Something like FullHD to UHD 2-in-1 running on Broadwell ULV does make sense, as it is essentially a PC Ultrabook with a Tablet mode or vice-versa. Windows is still more of a productivity platform than Android, so there would be a definite differentiation.
However, the mainstream ultramobile battlefield, with cut-throat prices for both SoC chips and the end products, may not be the best thing for Intel to enter. Perhaps a reasonable goal of creating and maintaining a 10% market presence in the smartphone and tablet field, not unlike that of Apple in the desktop and laptop space, would fit the best. It would be big enough to create a nice unique-value
niche and have most of the apps running native, but it would not be seen as a major threat to the ARM side, and other things would basically continue as usual.
However, on the high end, where those same ARM vendors are drooling after Intel’s high margin, four digit priced chippery, Intel has to stay resolute and, by accelerating the product launches and keeping the huge performance delta, show to those vendors that it will take forever and a day for them to catch up. Broadwell EP should not be delayed from the yearly refresh cycle, and neither should its Skylake follow-on. The profitable enterprise SSD, networking and interconnect programs are there as well, and they should move forward at the same rapid pace.
If there’s a way to justify even higher per-socket chip prices for even more powerful CPUs for even denser datacenters – where power and space are a constraint – then maybe there is a fresh way forward.
How about looking back at those previous non-x86 RISC architectures that still leave ARM in the dust as a way forward for Intel, while using the existing socket and chip infrastructure? After all, x86 being x86, there seems to be some sort of practical ceiling – somewhere around $5,000 per socket in Xeon E7 series – that the market is willing to accept.
This is still only about one-third of what IBM can get away with its top end POWER8 offerings, not to mention its ultrafast, hugely pricey MCM flavours. What if we had a much faster complementary RISC, yet Xeon E7 socket-compatible solution that provides enough extra performance, footprint and feature benefit that the users are willing to pay $10,000 per socket for it?
Especially if much higher instructions per cycle per core could be achieved even in usual apps compared to the x86? The Chinese “Shenwei” Alpha program, leading to a fairly compact 100 PFlop machine in about a year’s time, could – maybe – be the right hint. And yes, it already leaves ARM in the dust.