17
Oct

Intel announces the debut of Core M Processors

During Intel’s Q3, 2014 Earnings Conference Call, CEO Brian Krzanich announced the debut of the Core M line of core CPUs. The first devices powered by this new processor platform, per Krzanich, will come to market before the end of October, 2014. Computing devices powered by these processors, Krzanich noted, will feature “full core performance”, and a “fanless design enabling breakthrough designs and form factors”.

These processors appear to share a lot of the features of i3/i5/i7 cores powering Microsoft’s Surface 3 Pro tablet. Chip architecture permits a “razor thin design” (~9mm) and extended battery life (up to 9 hours). The graphics performance of the chipset has also been enhanced and optimized for online content.

The promotional content on Intel’s web site on this Core M chipset continues themes Microsoft employed during its debut of the Surface Pro 3: 2-in-1 devices are portrayed as viable replacements for “laptops”, which are characterized as slow, heavy, and inefficient. With these devices consumers will no longer have to purchase tablets for entertainment, and PCs for work: both functionality will be available from these 2-in-1 devices, and, Intel contends, with superior performance.

There is little indication this writer could find on Intel’s web site, or elsewhere, about specific devices running on one of these CPUs. Price point will certainly be an important consideration for Intel OEMs, so the early examples of devices powered by Core M processors may tell us a lot about just where Intel has assumed devices powered by Core M processors will be positioned in the market.

Emulating last year’s hot features — ultra thin form factors, long battery life, lightweight devices with high definition displays and graphics — may not amount to much in 2015. If the ASPs consumers end up paying for these devices hover around the price points for Microsoft’s Surface Pro 3 devices, we think market demand will be a lot less than hot, and restricted to the high end of the BYOD, consumerized IT segment.

It would be nice to see these processors powering devices in the $300 – $600 range. But, as of the date of this post, we have no examples to point to of what the street price will look like for them.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

24
Sep

Can a set of entirely positive market comments endanger the revenue stream health of a tech hardware business?

Apple’s September 9, 2014 new products debut has magnetized an almost entirely positive set of market comments. But can such a set of editorial content actually work against Apple? The lopsided set of positive, almost glowing market commentary about the iPhone 6, 6S, iWatch, and iPay reaches a pinnacle, of sorts, in a piece written by Tiernan Ray, which was published by Barrons on September 16, 2014. The title of this article is Apple: Don’t Listen to the Doomsayers. Even Ray’s decision to include a contrarian opinion expressed by Doug Kass of Seabreeze Partners in his bucket of “doomsayers”, in this writer’s opinion, exemplifies the excessive weight of positive opinion about these new products, and what they promise to bring to Apple.

So, to answer the question posed in the title of this post, we certainly hold the opinion an almost unanimously positive market reception for a set of comparatively very expensive products like these from Apple, can be dangerous to the financial health of the ISV producing them. It is simply not tenable, in this writer’s opinion, to assume Apple will be able to pay for the very high market capitalization it presently enjoys by continuing to focus on the top of the consumer market for these devices. Regardless of whether the cost of purchasing an iPhone 6S is subsidized by a carrier here in the US, or a consumer ends up paying outright to purchase one, a $199.00 street price is not reflective of the TRUE cost of acquiring the product.

The US market is trained to react positively to offers fueled with artificially low prices. Not so the rest of the world, and, especially not so in emerging markets. These other locales and communities of consumers are not likely to line up to buy either of these smart phones anytime soon. These products will only be available, at launch, in a basket of countries, and, in this writer’s opinion, for good reason. Average global consumers simply cannot afford these devices.

What is even more troubling about the editorial euphoria bubbling up around these devices and the debut, as a marketing communications piece in its own right, is the complacency expressed by what is referred to as the “mainstream media”, here in the U.S. on the question of whether average consumers here in the US will have the fortitude to make rational decisions about whether or not it makes sense to purchase one of the products.

One popular publication ran a headline something like this: “Like it or not, Wearables are Here to Stay”. Have we really reached the age of “solution without a problem” on steroids? This writer does not think so. If consumers do not need wearable tech, then they won’t buy devices in the category. Certainly, different consumer segments exhibit different needs, but all this talk will have to evolve into buying action before we can really be convinced a shift in consumer sentiment has occurred.

Bottom line: the old adage “too much of a good thing” speaks the truth. It will be interesting to gauge results a quarter or two down the road.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved