The Mercury News is reporting today that a large number of Intel’s partners, including Apple, are considering displacing the firm with ARM processors for tablets and laptops. Given that the vast majority of tablets today run ARM processors, this really isn’t that big of a stretch and the analyst community called this one over a year ago. Intel, for much of the market, is the entrenched vendor, which should allow it to weather this storm much as it did previously with Transmeta, but two things are different: This time one is BYOD and the other is cloud computing. Together they could dramatically weaken, if not eliminate, Intel’s historic advantage.
Interestingly, played right, it could be McAfee, Intel’s recent security acquisition, that could be its competitive edge but it would have to bring this weapon into play quickly or the increasing momentum away from x86 could overcome this effort.
The reason massively entrenched vendors like Intel and Microsoft can often fall well behind competition and yet still prevail is the transition cost. Once a vendor becomes entrenched, the ecosystem that surrounds it becomes so robust that the cost of replacing it is virtually impossible. However, IBM was the most entrenched vendor up until the late ‘80s and it was hit by the combined wave of personal computers and client server computing and broke under that wave, nearly failing as a company. This showcased the downside of being an entrenched vendor and that is relying on that entrenchment as your primary defense.
A major part of Intel’s entrenchment, the part that is the most robust, was the preference (and x86 in general) for it as the only approved technology for desktop computing in private and public sector business. It has only historically been threatened by other x86 vendors like AMD and Transmeta — even DEC with its Alpha chip was only able to make minor headway by emulating x86. But BYOD introduced iPads to companies, which not only broke Intel’s entrenchment but opened the door for Apple and suddenly both vendors were at risk.
Even with BYOD, it is unlikely that risk could have been very pronounced or lasting had it not been for the ability to connect these devices to cloud resources to make them functional. Eventually apps were authorized, but the initial penetration, enough to get to critical mass, was by way of Web services and it was the combination of BYOD, which brought the devices in, and cloud services that got them to work that created the real threat.
I should add that app stores clearly helped as well, stepping in and making company apps running on Apple’s platform a much faster path to making these tablets more useful than otherwise would have been the case. But had BYOD and cloud services not opened the door, I doubt the app store would have played much of a role, which is why I subordinate it here.
However, while Apple and its implementation of ARM, at least on tablets, has been the big initial winner, it is Google that likely showcased the biggest exposure to this platform in the near term. Like Microsoft, it simply didn’t take security seriously and didn’t adopt the practice of actively concealing problems the way Apple did (and admittedly had far more of them due to allowing far more freedom with regard to how users got apps). The end result is that the Android platform is increasingly presented as a massive malware magnet and it is connected solidly to ARM and ARM is connected increasingly to Apple.
However, even Apple recognizes that it hasn’t taken security seriously enough and it is attempting to rectify the situation but is believed to be about a decade behind Microsoft in doing so. However, Apple's control and containment approach does mitigate much of the problem today.
Intel, however, not only has a decade lead in working on this problem, but it is the only one of the players that owns a leading security company and it has been working to embed security into the hardware. Given the increasing level of threat, played right, it could once again become the only approved technology in the public and private sector and hold onto its market, but only if it moves on this problem more aggressively and makes the ARM security exposure unacceptable in contrast.
Currently, the market isn’t there and with Apple rumored to be taking its future PCs to ARM, the clock is ticking.
Intel did correctly both anticipate this threat and, with the acquisition of McAfee, gained a strong tool to overcome it. But while its hands-off acquisition process did assure that it didn’t break McAfee, it hasn't been able to demonstrate the crucial embedded benefits of owning the company yet and the firms don’t yet appear closely coupled against this coming Intel threat.
In fact, it is likely that either McAfee or some other firm may address the ARM competitive weakness before Intel can demonstrate its security competitive advantage and, if that happens, ARMageddon will result.