I am perplexed by the announcement of Intel Corporation (NASDAQ:INTC)‘s intention to enter the streaming market, or Internet TV as it is being called. For those that paid as little attention as I did, Intel is offering to stream TV shows 7 days after airing without having to program your DVR. Basically, we’re all busy people, and we cannot be bothered to watch shows when they air or to program our DVRs properly. Most people are DVR-savvy, but that knowledge will fall into the arcane eventually, like programming a VCR.
After being dominant in semiconductors, processors really, for a long time the market is finally changing. The PC market is going to shrink and flatten out. I will always have a desktop for gaming purposes, but overall the market is shrinking or stagnant. It is not coming back.
Intel made one size fits all processors. The goal was to have the broadest appeal. It allowed Intel to rise to the position it is now. Power and heat issues were never really an issue during the rise of desktop computers. A bigger fan and a better power supply would do the trick. Heat issues came into play with laptops, but even then a really hot laptop led to a warning to be careful placing the laptop on skin. Hence the change from laptop to notebook in nomenclature. Despite all the space and heat-reducing features, when smartphones came around Intel chips couldn’t make the cut.
ARM Holdings plc (ADR) (NASDAQ:ARMH) could be called the most direct, in industry terms, reason for Intel’s troubles. Obviously, ARM’s success and Intel’s difficulties stem from the same large scale factors. Smaller products requiring smaller chips. In computing, smaller always defeats the larger product as a rule of thumb. We have gone from massive mainframes to small tablets and phones. ARM is all about smaller. System on chip downsizes the traditional computer into a small piece of hardware that has everything you need to run a device.
ARM’s approach is not the one size fits all. They make their own processors, but they also license out the instruction set. The flexibility for customers to design something that suits their needs perfectly. Instead of one size fits all there is a tailored option. PCs were perfect for Intel’s universal approach. Different manufacturers could use one of Intel’s products despite the other components as long as they were all compatible. Everything is becoming specialized. You cannot cobble together a smart phone or tablet from off the shelf components at home.
ARM will continue reaping the rewards of being the source in one way or another of smart phone chips. Advanced Micro Devices, Inc. (NYSE:AMD) is going to debut a SeaMicro server with ARM-based chips in 2014. High power servers are not the only style of servers needed, there are many tasks that do not require high processing power individually though there are a ton of them. That is where these microservers come in. They are basically a cluster of small computer systems shoved into a box, and the boxes are mounted on racks. A software, called a fabric, allows all the systems in all the boxes to function in unison.
