Dr Hermann Hauser says mobile makers don't buy CPUs

ARM co-founder says Intel CPU business ‘doomed’

The co-founder of mobile CPU specialist ARM said that Intel’s microprocessor business is ‘doomed’ as mobile computing devices replaced the PC device in the future.

Speaking to the Wall Street Journal, Dr Hermann Hauser said that the total value of ARM CPUs solid has over taken Intel’s micro processor revenue. However it’s not clear how Dr Hauser calculated the figure since ARM microprocessors often appear inside complicated ‘system on chip’ designs containing a myriad of other hardware to power mobile devices such as smartphones.

ARM also receives a relatively modest royalty for each of such chip sold compared to the premium prices Intel is able to charge by being the vendor of not only the IP but also the chip itself. While ARM has been spectacularly successful in the mobile area with ARM processors in around 95 per cent of mobile handsets, the firm’s revenue stood at just $305 million in 2009.

That’s a drop in the ocean compared to Intel’s $35 billion dollar business. Intel has also stated that developing a product suitable for mobile devices was a key priority for the company and it’s also unleashed a barrage of other activities to ensure that operating systems would be available to suit the firm’s stock in trade x86 instruction set.

However Dr Hauser said that it was not Intel’s ability to create an Atom CPU as good as an ARM CPU, but because Intel has “the wrong business model,” he said.
“People in the mobile phone architecture do not buy microprocessors. So if you sell microprocessors you have the wrong model. They license them,” said Dr Hauser.

Hauser said that this put Intel in competition with every chip-maker in the world and cited the firm’s acquisition of Infineon as an attempt to gain mobile radio technology, referred to as baseband processors in the industry, and to transform itself into a company that would offer such integrated parts with its own CPUs.

“Whether they can morph themselves into a baseband company remains to be seen,” said Dr Hauser.

The Wall Street Journal has further comments from analysts.

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