The great x86 pivot: Intel and AMD break for new markets in 2014

Intel goes for tablets, 2-in-1s

For 2014, Intel is focusing on what it calls 2-in-1s -- systems with both docks and tablet components that snap together or pull apart. That might seem like a gimmick, but the way in which these designs are presented to the mass market reflects a fundamental change of thinking. In the past, 2-in-1 systems have been tablets first and foremost with overpriced docks that offer minimum functionality, yet cost $100 or more for a USB port and a keyboard. This has changed. Modern x86 2-in-1s integrate the dock as standard and don't slap on an enormous price for doing so.

When Microsoft launched Windows 8 in late 2012, ARM tablets were supposed to take the low end with Windows RT, while x86 tablets based on Clover Trail occupied the $500 to $800 space, and Ivy Bridge-based tablets took the $800-and-up market. This failed rather impressively. ARM-based Windows RT tablets didn't establish a buffer for Intel's Clover Trail; they failed to sell. The Clover Trail-equipped systems, meanwhile, offered terrible performance compared to existing laptops at the same price points.

The change has been driven by the realization that Atom cannot continue to be treated as a threat to Intel's Core business. While Haswell made impressive power consumption gains, Intel still needs a chip that can sell into fanless systems and that serves as a lower-end, lower-cost buffer for its most expensive parts. Strong competition from ARM means that Chipzilla no longer has the luxury of creating mediocre-performing hardware year after year and proclaiming it a winning strategy.

The Broadwell family

Next year, Intel will offer multiple Broadwell product families, including a rumored Broadwell-U (Ultrabooks) and Broadwell-Y (tablets). The tablet chips will reportedly target fanless operation, and offer a TDP of 4.5W and an SDP of 2.8W. As for how effectively this will compete with chips from ARM, it's better to focus on the "fanless operation" data than the TDP figures.

Pushing Core-derived chips all the way into fanless chassis is a major achievement. One of the problems with Microsoft's Surface family, for example, is that the Intel-derived parts are slightly thicker and noisier due to the need for a cooling fan. If Intel can offer these improvements without the corresponding increase in weight that we've had to put up with until now, then Broadwell could catch on with professional customers who don't want to skimp on performance, weight, or battery life.

Next page: AMD's assault, game consoles, and new footing

AMD's multi-pronged assault

The console question

There's no way to predict exactly how much money AMD will make off consoles in 2014. We know both Microsoft and Sony claimed more than two million sales apiece within the first few weeks of availability, but not much else. If we assume total holiday sales of six million systems between both manufacturers and use the estimated $100 to $110 cost of the AMD chip combined with AMD's comments on its operating margin for the semi-custom business (during the Q3 conference call, AMD CEO Rory Read said that margin was in the "mid-teens"), then we can assume AMD makes between $14-$16 per console sale. That works out to a pre-tax profit of some $80 to $100 million per quarter.

AMD's ARM server play

AMD's first Cortex-A57 chip, codenamed Hierofalcon, is supposed to debut next year at 15W to 30W with up to eight CPU cores and support for 10Gb ethernet. The stats on the core and its associated TDP indicate that AMD wants to hit Intel in terms of raw performance, not just a hyper-optimized power play.

With Calxeda gone, it's possible that AMD will step into a role as one of the premiere ARM embedded vendors in 2014, provided that demand materializes for these types of solutions in the first place. AMD's ownership of SeaMicro gives it an advantage in one respect -- it can build the solutions it wants to see brought to market, rather than attempting to cajole manufacturers into creating them.

HSA finally comes to market

Finally, there's Kaveri and AMD's first HSA-enabled chip to hit this space after literally years of work. Kaveri-based chips will launch for both consumer and server markets in fairly short order, replacing the existing quad-core Piledriver chips and (hopefully) offering a mixture of higher single-threaded performance and the option to use the GPU as an accelerator in a variety of tasks.

Ultimately, we expect Kaveri's HSA capability to have only a very modest impact on AMD's APU sales. HSA faces the same problem as any new standard; no matter how awesome eventual performance might be, no software exists in the present day to take advantage of the function. Oracle will add HSA support with Java 8 this year and project Sumatra, but native support for HSA execution won't appear until Java 9, currently expected in 2015.

It's going to be harder for AMD to build support for HSA in the x86 world, given that it commands only a minority of that market. Some ARM vendors, like Qualcomm, may also adopt HSA on future products, but being first out of the gate often means that early support is never as useful as early adopters would like.

Seeking new footing on treacherous sands

Intel and AMD are both trying to reposition themselves to better respond to and anticipate growth in the computing markets of the future. Of the two, AMD has gone farther in its quest to reinvent itself, but is also in the more precarious position. AMD has bet on consoles, on HSA, on ARM, and to a lesser extent, on Mantle. If these offensive maneuvers don't win it sustained market share growth and higher revenue, it's going to be in serious trouble.

Intel, meanwhile, has the luxury of playing a more measured defensive gain. While it clearly takes ARM's threat in the datacenter seriously and still wants to be an active player in mobile markets at some point in the future, the failure of Windows RT and the lack of any major datacenter opponents give Chipzilla time to consider its course.

What's striking about 2014 is the degree to which AMD and Intel are looking past each other for opportunities in areas. AMD has Mantle and its console business, while Intel is working to support no fewer than five operating systems (Android, OS X, Chrome, Linux, and Windows). All of AMD's discussions of tablets remain Windows-focused, which makes sense given their more limited resources.