When Warren East, CEO of ARM, and Rich Beyer, CEO of Freescale, met up a couple of weeks back, one of the topics on the agenda was, most likely, an exchange views on the upcoming entry of ARM-based chip-sets into the netbook market.
Because both of them came out of the meeting pretty much agreed on what needed to be done to get ARM-based chip-sets into a market which is currently a domain 100 per cent owned by the Intel Atom.
East says that for ARM, the netbook market is: "Not important numerically, but it's strategically important. We view it as an exciting opportunity."
"New product categories can be disappointing - look at PDA," East philosophises, "it could have been a 100 million unit opportunity. Now, today, in smartphones, we're seeing a 200 million unit market - and they're really PDAs."
Warren East's view of how much market share ARM-based chip-sets could get of the 2009 netbook market is: "I imagine realistically we're looking at double digits - reasonable double digits."
Freescale has just launched its entry into the netbook chip-set industry with an ARM-based chip-set which is expected to deliver a netbook at a retail price of $200. When does Beyer see netbooks on the market using ARM-based chip-sets?
"I think we'll start with a reasonable number of people in the second half of 2009," replies Beyer. How many's reasonable? "Six significant players," he replied.
Can an ARM-based processor chip-set give as good a Web-browsing experience as an Atom? "Yes, I don't think there's any doubt about it", replies Beyer, "it's very powerful, very low-power, and we are collaborating to put the entire eco-system together to make ARM a competitive offering, to get the operating system, and to get the other players involved, to offer a rich experience."
"We're gradually making the ARM eco-system better", says East, listing some of the players involved: Adobe which is working to port Flash 10 to ARM for later this year, Canonical Ubuntu - the Linux O/S people, Microsoft Silverlight (Microsoft's answer to Adobe Flash) and browser company Mozilla Firefox.
"You can get an experience now which is absolutely fine", said East, "but it's like Michelangelo painting a picture - how do you know when it's really finished? You can always go on making it better."
Asked if he saw the netbook market as a separate category to lap-tops as Intel does, or as a low-cost version of a lap-top, as AMD does, Beyer replies:
"Primarily my opinion is this is a new category. Predominantly it will augment sales, to a smaller extent it will cannibalise sales. I would love to have that kind of device but not to use it instead of a laptop. When I bring a laptop home at weekends to do serious work, I need a laptop. For evenings I could just bring a small netbook home to check emails etc."
Asked if ARM-based chip-sets can penetrate into the wider lap-top market, East says: "Yes, certainly it's a possibility. All we do as IP vendors is provide solutions for our customers. We don't get into the business of calling the market. If it takes off, it's good for ARM."
Nvidia is another company, along with Qualcomm and TI, which have ARM-based chip-sets for netbooks. Recently Nvidia CEO Jen-Hsun Huang told Laptop magazine:
"The Atom platform is creating an installed base that doesn't run modern applications. It doesn't run anything well from Electronic Arts, it doesn't run anything well from Adobe, it doesn't run anything well from Microsoft", said Huang adding, "so, in a way, the Atom platform is creating an installed base of PCs that's going to eventually hurt the PC software industry."
Asked what he thinks about Huang's comments, East replies:
"I guess he was referring to the fact that if you want to run apps on Atom you need a slightly different version of the software. You end up with a slightly novel version of the software. It's a sensible sales tack if you want to minimise cannibalisation, but it allows you to be pounced upon by Nvidia."
eeeek! did East really mean what he said "All we do as IP vendors is provide solutions for our customers. We don't get into the business of calling the market. If it takes off, it's good for ARM" ?
If so give up now all you semiconductor vendors investing in ARM based silicon for this market sector. Beyer are you listening?
I hope East was just trying to throw the competition off scent. If ARM don't take control of their future in this market then there is no future in this market for them!
East's sentiments work well in the embedded market where B2B you have to position yourself as an enabler. But in this Netbook sector it will all be about the applications - the right type for this new platform - and as Huang says the existing one's just don't fit...and he's right. So ARM like Intel is going to have to think about the B2C sector and how to support that and in this case support the evolution of the right type of apps to support the NETbook environment...the clue as to what type is of course in the market sector name!
Geoff, My take is that East is understating the extent of ARM's involvement. After all he talked about the various initiatives with people like Adobe, he's just had a meeting with Beyer, and ARM and Freescale are making a joint announcement at MWC which is bound to be about apps, or facilitating apps. So I expect it will all become clearer next week and that you won't be disappointed. I certainly hope not anyway.
waiting with anticipation....up till now I'd been backing ARM to win out in Netbooks over time as the sector develops. But it really depends on the level of ARMs commitment....and their full understanding of what they'll need to do. It's a different game to the one they are used to.
Same here Geoff, the only problem is it's taking so long. Freescale say they hope to have 2 customers out with product based on their chip-set by Christmas. I don't know what TI, Nvidia and Qualcomm expect.
ARM says the work being done on software to enhance the browsing experience of devices using ARM-based chip-sets will be pretty much completed by the end of the year.
The worrying thing is that the ARM licensees don't seem to be co-ordinating their efforts - so far as I can see - though ARM could have a key part to play here.
But, as you say, it's whole new ball-game for ARM.
On the one hand they want to keep their traditional role as a neutral provider of technology, on the other hand I'm sure they'd love to co-ordinate an effort to take a swipe at Intel.
I had not picked up on the timing issue....end of this year to complete a basic sw framework for the netbook browsing experience intuitively seems slow to me too. It implies a reactive rather than pro-active approach to this market sector by ARM.
I suspect the reason goes back to the business model for ARM. If they apply their existing business model to this new sector it probably does not look very financially attractive. That's why it's a new game. They need to develop an additional business strategy to augment their existing model to make the sector pay.
Interestingly they have an existing ecosystem that if leveraged differently could very well provide that additional business opportunity in my opinion.
If they did this, then indeed they'd really be taking on Intel on a ground of their choosing. ARM will lose going head to head with Intel. Force Intel to come to ARMs ground will indeed be a likely win for ARM. At one level ARM is already doing this....and it goes back to the age old power agenda of ARMs marketing. But that's a technology battle...given time Intel can address that issue sufficiently for the netbook market sector. ARM needs a business model agenda that is new and forces Intel to yet again have to dance to ARMs tune.
This goes right back to my original point about what East said. It intimated that ARM are not thinking this way at all.
Good point Geoff I'm sure you're right, but ARM will have to be terribly careful if it tinkers with its business model.
Agreed. Change is scary. But in this sector you have to embrace change as the market moves so rapidly....that's why it's so much fun as a sector. Whether the netbook opportunity warrants a change to the ARM business model is certainly debatable. It's an opportunity. Is it a worthwhile opportunity? That's what they pay the big bucks to the likes of East to make decisions on.
Only history will tell us whether he's making the right decisions.
BTW I do not see any any application level strategic announcements at MWC by ARM....or Freescale. All the announcements fall into the same old same old framework of ecosystem needs for basic system level integration.
Yes you're right, Geoff, interestingly the Freescale MWC announcement about its partnerships was originally billed as going to be a joint Freescale-ARM announcment and then became just a Freescale announcment as though ARM was thinking: 'Oh dear maybe we're getting a bit too partisan here.'