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Intel chip dominance ends not with a bang but a whimper

Intel is considering outsourcing chip manufacturing. The move marks the end of a chapter for the semiconductor sector. American chip foundries no longer dominate.

It matters for the PC sector. Yet the implications go much further and could affect international trade, even politics.

Intel was the world largest chip maker for decades. Although it didn’t always have the best designs, it had the best sellers and the key relationships. The company’s ‘Wintel’ partnership with Microsoft defined the PC.

Apple’s role

When Apple switched from PowerPC to Intel, the dominance looked complete. That relationship lasted 20 years. Now Apple is moving back to its own processor designs. This means Apple can build faster computers and lighter laptops. Devices will be slimmer or have a longer battery life.

Intel was one of America’s key industrial giants. It continued to make chips in the United States long after other manufacturers, including high tech companies, moved their factories off-shore or outsourced to Asian factories.

In its prime the chip giant seemed incapable of making an error. It was relentless.

Economies of scale

One reason for Intel’s might was the economies of scale. The first of a new line of processors would cost hundreds of millions of dollars to build. Towards the end of the run, it could measure the cost per-chip in pennies.

Scale meant it got the best engineers, the best scientists.

And then it all stopped. Apple’s iPhone was the turning point. Intel missed out on making chips for mobile phones and tablets. Instead computer makers turned to companies like Qualcomm. Apple decided to design its own.

Either way, Taiwan Semiconductor Manufacturing Company or TSMC, got to make the chips. It became better at the job than Intel. If Intel does outsource manufacturing, TSMC is the most likely candidate for the job.

TSMC now makes more processor chips than Intel. It has the economies of scale. It has sharper skills, competitive pricing and everything needed to be market leader. At least when it comes to making processors.

Intel’s designs remain first class. But its rivals have caught up. Take AMD: For years it trailed far behind Intel. That’s changed. AMD’s Ryzen can deliver better performance while using less power than Intel processors.

Intel slow to 7nm

Unlike Intel, AMD is working with 7nm technology. That is, more advanced chip technology. We need to be careful here, 7nm refers to the size of chip components, but different chip makers have nuanced uses of the term.

If losing Apple wasn’t enough, last week the company announced it would delay moving to its 7nm process. The company slipped behind when it was late to market with 10nm technology. Now the 7nm line is at least 12 months behind schedule.

Intel isn’t going away. It managed to grow revenue 20 percent in the last quarter. The company sold almost US$20 billion worth of kit. Even the PC chip business, that’s the bit everyone worries about, was up seven percent.

Yet, it does look as if Intel is no longer the world’s leading chipmaker. It’s brand is no longer a name to conjure with.

Ryzen: When a desktop makes more sense than a laptop

The entire work model we built the concept of laptops around not only doesn’t exist anymore, it may not ever exist again.

Source: Rob Enderle Why a Desktop PC Makes More Sense than a Laptop Today – eWEEK

Enderle has a point when he says that laptops were built for a world we no longer inhabit. He is talking about the way we work has changed since the Covid-19 pandemic upended the idea of heading daily to offices and travelling to work meetings.

AMD Ryzen Pro

While he has a point, it is overstated. That may have something to do with the AMD Ryzen Pro advertisement that shows on the page. It may not. Let’s take the story at face value.

The AMD Ryzen Pro is a range of high-end processors for desktop computers. As always with AMD, there is a focus on performance. Beyond that the new processors are optimised for working from home on desktop computers.

Make that, working from home on a desktop computer when you work for an organisation with IT professionals. Ryzen Pro processors include a dedicated security processor and full memory encryption. They support remote management tools.

Is there really a trend away from laptops?

It’s all interesting enough, yet we’re not here to talk about that. The subject of interest is the trend away from laptops and back to desktops.

Enderle thinks it is a big thing. He writes: “I’m coming around to the idea that laptops as a trend are over, that the new trend will be desktop computers.”

In my book the trend is real enough. I’ve done exactly the same myself. Look out for a post on this when I have some time. In my case I switched before the lockdown and for a different set of reasons.

Yet dumping the laptop is not for everyone. Not by a long chalk.

Sure, we will work away from home less often. For some people it will stop and that’s it. For others there will be less working away from home. Not zero working away from home. When that happens, the laptop is still the right tool most of the time. You could use an iPad if you have a desktop. Many people would prefer to have the one device that works in both cases.

Some prefer laptops

The second reason why there won’t be as big a shift as Enderle suggests is that many people prefer laptops regardless. This may be because people prefer the physical form of a laptop. It maybe because laptops take up less room and do not need a dedicated desk and chair. Not everyone lives in a spacious mansion with a fancy home office.

According to this Statista graph, computer makers sold 166 million laptops in 2019 and 88 million desktops. In round numbers that’s two laptops for every desktop. In 2010 it was 200 million laptops and 157 million desktops, roughly four to three. The blue shows desktops, the dark blue is laptops and the grey shows tablet sales.

There has been a long term drift towards laptops. It stretches back beyond the graph. It’s possible the pandemic trend may halt the drift. Numbers may even drift back a little. But I’m certain desktops are not about to outsell laptops any time soon.

The PC: Reports of its death an exaggeration

It is more than a decade since people started telling us we are in the post-PC era. I’m guilty1. From memory the idea took off soon after crowds first queued to buy the original Apple iPhone.

There is something in the idea. PC sales peaked in 2011 at 365 million. In big picture terms it has been downhill ever since. Last year people bought 260 million PCs. In comparison phone hit 1.5 billion sales. That’s roughly six new phones for every computer2 .

Yet, to steal Mark Twain’s joke, reports of the PCs’ death are an exaggeration.

Who you gonna call?

Nothing illustrates this better than the response to the Covid–19 pandemic. Phone sales dropped when companies, schools and whole communities moved into lockdown.

Meanwhile PC sales are up 11.2 percent year-on-year. That’s according to IDC’s preliminary PC sales numbers for the second quarter of 2020.

All the big brands saw strong growth of notebooks and desktops. Apple, Acer and HP all saw double-digit year-on-year growth. Apple is up 36 percent on the year earlier. HP remains in the top slot with 17.7 percent growth. Dell was weakest with only a 3.6 percent increase.

Reports say HP took a punt early on in the quarter and increased its notebook orders with its suppliers. The bet paid off.

Notebooks notable

Notebooks were the biggest winners. Channels around the world reported selling out of many models. It didn’t help that China, where most computers are made, was in lockdown during the period and the logistics firms moving hardware around the world had reduced capacity.

The main driver was the shift away from offices to working from home. Schools sending students home to continue learning online was another major cause. Both of these were obvious to anyone watching events. Less obvious was the number of people buying home computers to help relive lock-down boredom.

An untold story of the quarter was the shift from retail computer sales to online stores. Customers couldn’t shop, but they could click online. It’s possible this change may stick as the world moves on from lockdowns. This may have wider implications.

Relevance

The PC may not be dead. Yet despite the new relevance, sales are still nowhere near the peak. And most analysts see the recent strong result as a one-off. The long slow decline may, or may not, have bottomed out, but no-one sees long term recovery.

Indeed, a worldwide recession is likely to have an impact on future PC sales. Mind you, the impact could be worse for phone sales.

Still, the key point here is that when the going got tough, people didn’t reach for phones, they reached for PCs. That should restore some confidence to the market.


  1. A previous, long dead blog of mine used the term post-PC an August 2011 entry IBM CTO: PC dead, we bailed long ago. ↩︎
  2. Tablets change things a bit, but you get the picture here ↩︎

Choosing the right work-from-home computer

Some employers will give you a work-from-home computer. Others leave the choice or even the cost up to you. You may be your own employer and make all your own decisions.

Either way here’s a short, straightforward guide on choosing the best computer for your needs.

Start by taking a breath. There is no need to stress. You won’t fail this test. Making the wrong choice will not be a disaster.

That’s because for most people reading this almost anything you buy will be adequate. It will get the job done. There are some exceptions. We’ll look closer at them later. But if you fall into the exception camp you already know that.

Here we’re going to focus on finding the right kind of computer for you to work from home. That means something you are comfortable with. One that fits with both your work and the way you live at home. We’ll consider entertainment and other non-work tasks.

We’ll leave specifics, which brands, operating systems and models for another time. This is the first of a series of posts.

What is a computer anyway?

Let’s start by looking at the big picture. When we say computer, we mean what people in the industry might call a device. It could be a desktop personal computer, it could be a laptop or a tablet.

There are devices that sit between these classes. There are 2-in–1 devices that sit between laptops and tablets. Desktop replacement laptops are another class straddling category. As you can guess from the name, occupy the space between conventional laptops and desktop PCs.

At a pinch the right device for your needs could even be a high end mobile phone. Premium smartphones are a least as powerful as most conventional computers. You can connect many phones to keyboards and screens to act more like everyday computers. Samsung designed the Dex range to make this easier and better..

For the sake of keeping things simple, let’s say a computer comes with a screen, a processor and storage. Most come with a keyboard and either a mouse or a touchpad. There are devices worth considering where these are an optional extra.

Cloud does heavy lifting

Earlier we saw that almost anything you buy will be adequate. That’s because cloud computing can do much, even all, of the heavy lifting. So long as you have a reliable internet connection you’ll be able to connect to cloud services.

There’s a good chance the software and tools your company work with are already hosted in the cloud. The most popular cloud software is Google G-Suite and Microsoft 365.

Even the most basic device can connect to the cloud. In some cases there are cloud versions of applications that you might run on a desktop when working in the office.

Being able to connect to cloud apps and tools like Zoom or Microsoft Teams covers most of the important stuff. Up to a point everything else in this post is about the icing on the cake. Your choices can make for a better working experience. They will give you something more comfortable to live with, can make you more productive and will offer more fun when you’re not working.

Laptop

Laptops

The perfect device depends on what you intend to do, where you intend to do it, how you live and how much budget you have.

Laptops are the most popular choice by a long way. They range from tiny ultraportable laptops to huge desktop replacements. You can pick up a serviceable low-end laptop for a few hundred dollars or spend thousands.

If you don’t have a spare room or a rumpus that can act as a home office, a laptop you can pack away means you can work on the kitchen table or anywhere else. As things return to normal you can take the laptop to a cafe or the local library. You’ll also be able to carry it between the office and home when needed.

Laptop downside

The laptop downside is they often don’t last as long as desktop computers. In part that’s because they can take more of a hammering. Moving them around and bumping them doesn’t help.

Some laptops are fragile, others are more robust. As a rule of thumb smaller, lighter, thinner models are more robust. But first impressions can be deceptive.

Although it is easy to upgrade some laptops, that’s not always the case. This means the internal hardware can become out of date if newer, more demanding applications come along or if your needs change.

Unless you have technical and fine motor skills it is best to leave laptop upgrades and repairs to professionals. There is a cost, but it is often worth the investment.

You will hear stories of people who made a laptop last a decade or more. It happens far more often than the industry might have you think. Yet in general you can expect about five years useful life from a laptop if you look after it.

iPad Pro 12.9-inch 2018 with Pencil

Tablets

If mobility is your main consideration you may do better to choose a tablet with a keyboard case.

Tablets are easier to move around even when compared with light laptops. You can sometimes work on them in places where laptops feel clumsy. If space at home is tight or there’s a lot of competition for the kitchen table, a tablet could be your best bet.

Although tablets are not always more robust than laptops they often cope better with knocks if you have a nomadic working life. You will need to buy a cover or case to protect the screen. Often tablet keyboards double as protective covers.

Tablets tend to go a longer time between charges than laptops, but that can be down to how you use them.

You can buy tablets that connect direct to the mobile network for communications. Yet most tablet users do fine relying on Wi-fi or by tethering to a mobile phone to reach the internet.

Dell Inspiron 13 5000

Hybrid computer, 2-in–1s

The distinction between tablets and laptops is blurry. There are tablet-like laptops and laptop-like tablets.

Some laptops fold, origami style, to become tablets. Some can also work in a tent configuration. This is useful for watching movies or giving presentations.

It’s not always the case, but foldable laptops can be more fragile than straightforward tablets or laptops. Take care when choosing.

Another consideration with hybrids that almost everyone overlooks is that buyers often end up using them as only a laptop or tablet.

Given they tend to cost a little more than straight laptops and tablets, this means you can waste money. There are almost always better ways to spend that part of your tech budget.

Desktops almost forgotten these days

Laptops outsell desktops almost two to one1. In round numbers that means desktops only account for one computer sale in five.

There is still a strong case for choosing a desktop computer. Yet they are not right for everyone2.

Desktops can have big screens, far bigger than even the largest laptop. Big screens are great for productivity. They allow you to place documents or windows side by side. If you work with spreadsheets you can see a lot more data.

Desktop computer productive, fun

At a pinch a large desktop computer screen can double as your television. Lots of people do this with laptop or tablet screens, but larger screens are better. Desktops can also have far better audio speakers than laptops. In general they are better than laptops for games and other entertainment software.

You can also use a proper keyboard. While many laptops have great keyboards, desktop keyboards are often better. Again this can help productivity, especially if you are a touch typist.

In some ways desktop computers can be less expensive than laptops. You generally get more raw computing power, storage and graphics for your money.

Desktops also tend to be far easier to upgrade. They take less of a hammering, so you can make them last far longer than a laptop.

You need to have enough room and a spare desk or table for a desktop computer. You can’t pack it up when you’re not working. You can push the screen back and store the bulky part under the desk.

Don’t get too hung up on specifications

At the top of this story it says specifications are not the most important thing to consider any more. That’s true, but it needs more explaining.

Almost every device has more than enough power to handle all your everyday tasks. Writing, web surfing, playing music, watching videos and Zoom calls will not challenge any modern device.

Likewise every modern device will come with a screen of some description, that way you can see what is going on.

Storage used to be a huge deal. Today, if there’s not enough in the device you choose, you can make up for the shortfall by using cloud storage.

Where computer specifications matter

More processing power and memory means you can run more applications at the same time. You also need a more powerful processor if you want photo, video or music editing.

People who work with large databases or huge spreadsheets also need more powerful processors. But you can often let cloud computing do that kind of heavy lifting.

So by all means choose an upscale specification, but don’t waste money buying more computer than you will ever need. You’d be better off spending that money on a better quality device. We’ll come back to this point in a later post.


  1. In case you were wondering laptops outsell tablets by around four to three. ↩︎
  2. I’ve recently gone back to using a desktop as my main work-from-home computer. ↩︎

NZ device sales fall, would have collapsed but for Covid–19

Gartner’s latest New Zealand shipment forecasts makes for grim reading if you are in the device business.

The total device market is set to drop by 14.6 percent in 2020 when compared with 2019. That means a total of 360,000 fewer devices.

New Zealand fares worse than the rest of the world which Gartner says will see a 13.6 percent fall in device unit shipments.

Falls everywhere

There are falls in each category Gartner measures, see the table.

New Zealand shipments forecast by device type (thousands of units)
Device Type20192020
Traditional PCs (Desk-Based and Notebook)439396
Ultramobiles (Premium)199190
Total PC Market637585
Ultramobiles (Basic and Utility)538474
Computing Device Market1,1761,059
Mobile Phones1,3251,077
Total Device Market2,5002,136
Due to rounding, some figures may not add up precisely to the totals shown.
Thin and light notebooks are listed under premium ultramobiles
Tablets and Chromebooks are listed under basic ultramobiles
Source: May (2020)

Mobile phone sales have fallen faster than computing devices. Gartner forecasts 1.08 million units in 2020 compared with 1.36 million units in 2019. That’s a drop of nearly 19 percent.

The analyst company says it expects consumers to extend the life of their mobile phones replacing them on average once every 2.7 years. For more on this see How long should I keep my phone?

Pandemic device impact

Looking at the worldwide numbers, Gartner says the fall could have been so much worse if it were not for pandemic lockdowns. Because millions of people were forced to work or study from home there was an increase on spending on notebooks and tablets.

Gartner says getting on for half of all employees will work remotely for some or all of the time after the pandemic. This compares with around 30 percent of employees beforehand.

This has accelerated the move from desktop PCs to notebooks.

Phones

While people have used their phones more during the lockdown, Gartner says lower disposable incomes mean that people will upgrade more slowly than in the past. Gartner sees the average life of a mobile phone increase from 2.5 to 2.7 years.

One other trend spotted by Gartner is the relative lack of interest in 5G handsets. Before the pandemic it was widely thought that the appearance of 5G mobile networks would kick-start a handset upgrade cycle.

Gartner now forecasts that 5G phones will only account for 11 percent of handset shipments this year. In part this is because of the delayed delivery of new handsets. Gartner also says the extra charges imposed on 5G customers is inhibiting sales.