Sure enough, the day after the big announcement, Wall Street reacts to what they see as the consequences of Intel "giving up on phones" and now they seem to think that Intel is saying they can't even make a go of it in tablets by themselves.
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"Wells Fargo’s David Wong, who has an Outperform rating on Intel, and a $29 to $34 “valuation range,” writes that while “Intel has successfully established itself as the primary supplier of processors for Windows based tablets,” nevertheless, Intel has to make traction with Android machines:
To hit its 40 million tablet processor goal for 2014, we think that Intel will have to begin showing some traction in Android tablets fairly soon. We are not aware of any major tablet maker having formally launched Android tablets using Intel’s Bay Trail processors. We had first expected to see Bay Trail in Android tablets in September 2013, and we believe that the debut of Bay Trail in Android tablets has, by now, slipped by perhaps as much as 9 months from Intel’s original hopes. We will be looking for announcements relating to Bay Trail based Android tablets made in conjunction with the Computex Trade show, which begins on June 3."===========================
"Stacy Rasgon of Bernstein Research reiterates an Underperform rating on shares of Intel, and an $18 price target, writing that Intel’s putting in the essential pieces of the chip, so it’s not clear that Rockchip is contributing much:
Rockchip’s main contribution seems to be their customer relationships and base, allowing an Intel-branded device to be sold into the low end of the emerging markets by a company that knows how to do business there [...] We remain somewhat confused as to how specifically Rockchip will benefit from the agreement. The SoFIA-based parts carry no “contra-revenues” and Intel indicated there were no investments or financial connections between the companies as a result of the announcement. – We presume that there must be some sort of MDF or other support coming from Intel to Rockchip, not classified as “investment” or “contra-revenues.” We suppose Rockchip gains access to a 3G modem, but cellular penetration in these low-end tablets remains relatively low (and stand-alone 3G is rapidly losing relevance anyway). – Frankly, without hard dollars thrown their way, the only thing we really see Rockchip gaining from this is the “opportunity” to sell a sub-standard x86-based tablet part a year from now to compete directly against their own existing ARM-based product portfolio for low-end tablets."==========================
"Perhaps the most extreme view is from Drexel Hamilton’s Richard Whittington, who has a Hold rating on the shares, and a $28 price target, and who writes that this may be prep for Intel to bow out of some segments of the tablet market:
Evidence that rather than an endlessly destructive PC-Mobile dichotomy, three markets are emerging, including a re-made PC Intel unwilling to accommodate with low power, low priced CPUs three years ago, Apple created the now ubiquitous iPad that curtailed PCs Yet as users have flocked to these and still smaller and less expensive mobiles, the PC market appears to be making something of a comeback Multitasking but especially a keyboard even for email but especially for Office and now widely available 2:1s seem to be sparking new life in PCs. Studies suggesting 2:1s used 85%-90% as PCs combine with a much stronger economy and pent-up demand to sustain a year’s PC refresh. Tablets look at risk of being pulled apart by larger phones (phablets) and 12” PC (Surface for Office?) and MacBook Air, each with x86 CPUs. Intel could redefine its strategy to spin-off sub-$10 processors while focusing on PCs and keyboard tablets running Windows or Mac OS. $3bn+ tablet subsidization holding its stock down, yesterday’s RockChip deal could morph into a face-saving Intel exit from lowest-end tablets. Its processor lines set for a 30% die size shrink to 14nm next year, Intel still needs to fill its fabs to re-establish its shares as investment-ready."==========================
No matter which view is taken, this move signals Intel's first formal admission that they cannot make a compelling mobile anything by themselves.
My read --
Rockchip wants the main Intel processor technology which they will then blend into a mix by replacing the somewhat weaker main processors that ARM gave them with the A17 deal.
Rockchip did not buy (nor pay for) the stronger A15 or A57 64 bit main processor technology and now hopes to wang-bang Allwinner and ARM by dropping in a quartet of 64 bit Intel main processor cores in with the Mali 72x graphics they already leased the rights to.
Now, this is all seems semi-legal enough for them to do right now; from 100 miles away looking down at it -- both Intel and Rockchip are ARM licensees after all. But, they are colluding to tweek their existing license agreements some though by doing some mixing and matching on the A-17 package deal that ARM granted
to Rockchip last year.
Putting Intel's name on the proposed Frankenstein is a violation of Rockchip's ARM agreement on A17 right off the bat.I would suspect ARM's written license agreements will get some review and some changed wording going forward. The A-17 was a turn key package job and Rockchip isn't currently a full design licensee on the A-17 package right now anyway, are they?
ARM probably won't have to sue anybody over this, but they will act to prevent this sort of game in the future. Or, if wording in the existing turn key package agreements is enforcible, then Rockchip may lose the license for ARM A17 completely if they start fiddling about with it with Intel.
Yes, Intel bought a full DESIGN license -- but did Rockchip do a full design license when they did the A17 deal last year? No they did not. Does Intel have any license rights to the A17 package deal and the Mali 628 graphics chipset specifically? No, they currently do not.
Hmmmmm?
What did Intel actually go buy right before this little game of theirs hit the table?
If it is permitted, then Rockchip has the potential to Frankenstein up a really strong chipset out of the best of the various pieces,
but will they lose their good ARM relationship in doing so?
Does Rockchip realize that Intel's gate and circuit flow patterns are ass backwards to all ARM designs and that may mean they will have some of the same serious compatibility issues that Intel has never been able to whup in the past?
Or else perhaps ARM will just quietly cut Rockchip a A57 license deal if Rockchip will simply drop the whole Intel Frankenstein arrangement.
Look to see Allwinner to be making some serious moves soon to keep their arch competitor Rockchip from getting a march into 64 bit land ahead of them.
Look for ARM to be making some "rabbit out of the hat" moves to completely out-do whatever Intel/A17 Frankenstein that comes about and have it in someone else's hands proven out and in full production before Intel can slooowwly move along with their Rockchip Frankenstein to get it into any real production.
(Intel is still slow as molasses compared to ARM)
Look for Qualcomm to be moving quickly to exclude Rockchip from some 4G LTE radio technologies that Qualcomm owns (Qualcomm knows Intel is their real competitor and that Rockchip is no longer a friend).
Look for Rockchip to get Nokialized as an Intel puppet. Rockchip is betting their entire farm on this deal and hopefully realizes that Nokia didn't get anything but lots of head lumps and red ink from their original Nokialization process.