>> If ARM started making their own SoCs, it would compete directly with all its customers
Good luck to them. I know Google makes tablets and phones even though they own Android. That is not an excuse. We are looking for ways to jack up earnings and return money to shareholders. They can enjoy the cents they get per phone. Good luck to them.
>> Total valuation is not a useful measure for anything. What matters is growth potential into the future.
No problem. I look forward to the future but I want relevance today. I agree with you and I am not defending Intel for anything. I am saying that today, it is has a higher valuation than ARM and when you go through its history, it was more profitably at the age ARM is today.
> My point is now largely on the comparison of ARM and Qualcomm valuation. > I am talking about why ARM may consider to get into making things. I know they > have more valuable IPs than their current valuation because of their business model
If ARM started making their own SoCs, it would compete directly with all its customers. ARM has no modem IP and no experience selling chips. ARM's business model works so well because they are not really competing with anybody (apart maybe Imagination Technologies).
Total valuation is not a useful measure for anything. What matters is growth potential into the future. And the facts point to ARM having a much higher chance to give good returns over the next 10 years than Intel. What Intel did 30 years ago is not relevant today.
What matters today is that Intel's profits are declining, fab costs are increasing fast, TSMC is catching up, Intel missed all opportunities in mobile phones (a miserly 0.2% marketshare after spending many billions over 6 years) and now appears to push a summer student project (Quark) as their IoT chip...
Good point @wilco1...I was always impressed with ARM and wanted to buy their stock seeing their bright futures...but silly me, I always thought the stock was too expensive...so in my mind ARM valuation was too high ;-)
>> ARM is already making a lot of money for investors. For example if you invested 10 years ago, you would be sitting on a nice profit of 666%. Compare that to Intel's return of -7%.
That is bad analysis. At the same age, within a decade, Intel returned 5678%. You need to benchmark your time. Also, it does not matter the time of investment, we are looking at total valuation. Look into the future and not the past.
ARM must learn how to make more money like Intel does.
My point is now largely on the comparison of ARM and Qualcomm valuation. I am talking about why ARM may consider to get into making things. I know they have more valuable IPs than their current valuation because of their business model
Selling black gold may still be profitable, but you'd be crazy to invest into dinosaurs today. It's becoming very expensive to get that last carbon out of the ground. Regulations are getting stricter. Subsidies turn into taxes. If you don't feel the wind of change blowing then you'll miss the next big thing.
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