ARM chips away at x86 PCs
Analysts at Sterne Agee are projecting that emerging market growth could shift from x86 PCs to lower-cost WARM (Windows ARM) platforms.
"While PCs have seen the strongest engine of growth from emerging countries, the emergence of lower-cost ARM PC platforms in C2H12 could become a more attractive option for the low-cost geographies," Vijay Rakesh and Mark Kelley wrote in an industry note obtained by TG Daily.
"We believe many of the Asian PC OEMs, Acer, Lenovo and Asustek, with 10% of shipments already on tablets, are all working on Win8/ARM PC solutions, thereby lowering focus on core PCs. We believe 2012 could see 5% of NB and 2013 ~10% of NB move to ARM-based platforms."
According to Rakesh and Kelley, PC OEMs-ODMs began to work with QCOM-TXN on new ARM PC platforms in late C3Q (Sep). As such, the PC channel expects to shift 10-15% of the PC mix in 2H12 to ARM-based Win8 PC platforms.
"The attraction for ODMOEMs is that build-license cost structure is such that the OEM-ODM will make similar margins on x86 as ARM (unlike netbooks), while also delivering low-cost 'tablet competitive' platforms to the marketplace," the analysts explained.
"We [project] NB growth will start to slow from 10-20% y/y growth in the last 5 years to 5-10% growth in 2012-2014 as x86 sees share loss to new lower cost ARM platforms. We believe ARM platform growth is aided by the need for PC OEMs to compete with tablets/iPads."
However, Rakesh and Kelley acknowledged that ARM would face at least two "drawbacks," including the (initial) lack of a 64-bit capability (for average end users) and no support for Flash.
"[As such], ARM solutions could be limited to the low-end Netbook-type platforms on Win8 with limited capabilities... But we believe 32-bit platform in NB is still a considerable 20-30% of the PC platform that ARM can penetrate," they added.