Quote Originally Posted by Solus Corvus View Post
I find your analysis to be flawed. For one thing, exactly the opposite of what you describe is actually happening. Intel is competing with ARM for the low margin parts and AMD is filling the gap in higher margin parts.
Allow me to disagree. Here are my reasons :

1. Intel isn't competing for the low margin products. For example, Atom has higher gross margins than Intel's Celeron,single and double core Pentiums. Why ? Because you get 2000 from a wafer and you sell them for $40 in average. With Celeron/Pentium you get 400 and sell them for $60.
Same story is happening at MID/tablet/smartphone level. Intel isn't competing for $15 a pop cellphones, but for those which cost over $200 where they can enjoy high margins. They don't want to get in the price slime that ARM loves.
2. AMD isn't filling any high margin gap. I'm sure they'll price their parts at Atom like level or even lower. Where Ontario is competing you have current single and dual core Atom, superseded at the top by ULV I3/5s,than LV I3/I5s which are going to be replaced by SB very soon. I've heard that Intel has a backup solution a single core SB. Probably it will end up in the 10-20w range and things will be really intersting : 2 small Bobcat cores + large GPU vs. large SB core + medium GPU.
3. ARM targets the netbooks, a market currently worth 30-40m units. That's where Bobcat also tries to reach. Intel is attacked from both sides, true, but hey, if they can't handle the pressure who can ?

ARM might eventually make inroads into the laptop market, but it's already a force in the low power market. Intel might have a lot of disposable income but throwing a bunch of money at it won't necessarily make x86 better than ARM for low-power. I think AMD is smart not to try to enter that segment yet. Their little ontario would get strangled in the crib by ARM. AMD might have to compete with future products from ARM but Intel has to compete with current products from ARM.
The growth is in low power market. That's why Intel is going after it. The traditional PC market is yesterday news.
Intel covers the very top of the low power market with netbooks and Atom. There tablets below, MIDs and smartphone where Intel is a non-player. Their attempt to increase revenue by going into new markets is very logical.

AMD can sit on the sidelines and be confined to the x86 market or try to do what Intel does and go for ARM's throat. It is their choice after all.