Download - Biz Model for ARM
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ARM’s Entry into PC Market - A Business Model
MT5016: Business Models for Hi-Tech Products
Group Members: Chen Liang (A0082053N) Li Jianwen (A0077040N)
Wong Jian Wen, Desmond (A0082079Y) Wu Ai Long (A0089182W) Yen Jia Ting (A0082031X)
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Agenda
Introduction
Customer Selection and Market Segmentation
Value Proposition
Value Capture
Scope of Activities
Strategic Control
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Introduction
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ARM Embedded Processor
Main CPU Chip (SoC)
ARM Embedded Processor
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Background
ARM successful in current smartphone and tablet markets (>95% Market Share)
Still, multiple suppliers are designing ARM-based CPU for other devices like servers
Server (high) Smartphone (low)
PC
Processing Power required for PC:
Question: Can ARM leverage its PC entry on the
momentum generated in their already successful Smartphone market??
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Types of Personal Computers
Higher Processing Performance
Personal Computer PC
Stationary Mobile
Workstation
Desktop
Home Theatre
Laptop Netbook
Tablet Ultrabook
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Time
Overall P
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Server
PC
ARM High Perfromance
ARM
Tablet
Mobile Phone
ARM’s Processor Performance Vs. Different Market Needs
ARM TechCon in Nov’2012
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PC Market is Diversifying
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Existing PC Market
Dominant partnership between Intel and Microsoft
Strong Brand Names over the years
+ =
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Existing PC Value Chain
Design Service
Processor Core
Development
Equipment Vendor
CPU Design
CPU Manufacturing
System Level R&D
PC Manufacturing
Software/OS Development
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Intel in PC Value Chain
Design Service
Processor Core Development
Equipment Vendor
CPU Design
CPU Manufacturing
System Level R&D
PC Manufacturing
Software/OS Development
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What is happening right now?
OS CPU
Time for ARM to Enter!
+ =
All Supporting ARM
Happening
CPU Embedding
ARM Processor
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Customer Selection & Market Segmentation
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ARM in PC Value Chain
Design Service
Processor Core Development
Equipment Vendor
CPU Design
CPU Manufacturing
System Level R&D
PC Manufacturing
Software/OS Development
Microsoft Google Apple
CPU Designers: AMD, Nvidia, Apple, Samsung, Qualcomm, Broadcom OEMS: Dell, HP, Levono, Acer, Sony, Samsung Semiconductor Foundries: TSMC, Globalfoundries, Samsung, UMC
Vertical Disintegration :: ARM ONLY DEVELOPS PROCESSOR CORES
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Who are the possible customers?
Direct Customers
CPU Designers
Indirect Customers
OEMs (Dell, HP)
End Users
Strategic Partners
OS Vendors
Manufacturing Foundries
Microsoft Google Apple
CPU Designers: AMD, Nvidia, Apple, Samsung, Qualcomm, Broadcom OEMS: Dell, HP, Levono, Acer, Sony, Samsung Semiconductor Foundries: TSMC, Globalfoundries, Samsung, UMC
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Value Proposition
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Strategy Canvas for PC OEMs
High
Low
Performance (mips, GHz)
Power Consumption (mips/Watt)
Time To
Market
Instruction Set
Cost (mips/$, area)
Application Scope
Intel, AMD (Desktops)
ARM (Tablet, Laptops)
Peripheral Design
Complexity
HP, IBM (Servers, Workstations)
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Value Proposition for End-users (PC Consumers)
Value Proposition
Lower Processor Cost = Lower costs to produce PCs = Lower PC prices for consumers
Cortex A50)
High
Performance
Medium
INTEL ARM
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Value Proposition for End-users (PC consumers)
Value Proposition
Lower Power = Longer Battery Life
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Value Proposition
CPU Designers •Simpler and Customizable Designs • Easier instruction set • Shorter time to market •Effects of Vertical Disintegration ::Economies of scale in R&D
OS Vendors •Opportunity for them to penetrate wider market by providing processor-compatibility to the OS installed •Synchronize OS across devices
Apps Developer •Opportunity for them to enter PC markets by providing processor-compatibility to the Apps
Value Proposition
Low Power
Lower Cost
Shorter Time to Market
Customized Designs
Differentiation Opportunities
CPU Designers: AMD, Nvidia, Apple, Samsung, Qualcomm, Broadcom OEMS: Dell, HP, Levono, Acer, Sony, Samsung Semiconductor Foundries: TSMC, Globalfoundries, Samsung, UMC
OEMs •Power-efficient feature •Wider Range of Selection •Effects of Vertical Disintegration :: Lower system costs
End Users- PC Consumers •Lower Purchase Price •Lower Power consumption •Less Heat generated •Longer Battery Time
Semiconductor Foundry •Opportunities for them to cater to customers who want ARM-based PCs •Effects of Vertical Disintegration :: Economies of scale in terms of manufacturing
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Scope of Activities
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O E M
Processor Core Design
CPU Design Manufacturing
Vertical Disintegration
Value Proposition
Lower Cost
Longer Battery Life
Short Time to Market
Customized Design
Product differentiation
Opportunities to enter wider market
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O E M
Processor Core Design
CPU Design Manufacturing
Vertical Disintegration
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Vertical Disintegration Vertical Disintegration • Architecture platforms by ARM
• Joint development with OS
providers
• Multiple logical and physical designers
• Multiple manufacturers
• Value provided to Value Chain Unique ARM Architecture R&D resource Pooling Customized design Quick time to market
Longer Battery Life and Lower cost
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Value Capture
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Perform Research & Development
Design Processors chips as per customers needs
Sell design to Semi-Conductor Partner for license and royalty fees
How does ARM gets its revenue?
$
$
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Strategic Control: How should ARM protect and sustain its Profitability? Building an Ecosystem
Industrial Architecture
IP Management
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Building an Eco-System
Partnership on chip development
Business Development
Provide Embedded
Process for CPU
OEMs
Operating System
Components
Provide CPU
CPU Designers
Foundries
Manufacture Chip
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Building an Eco-System
High level of disintegration requires:
Strong collaboration among stakeholders
Business development with OEMs
Strong partnership increases ARM competitive advantage
ARM is successful only if
Partners are successful!
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Industry Architecture
Currently, High level of control by Microsoft and Intel:
Control interface between operating system, processor and personal computers
However, with strong collaboration with OS partners:
ARM can be successful
Microsoft – Value proposition of a power efficient and low cost processor
Google – Leveraging on its Android partnership to strengthen Chrome in the PC market
Control interface can be changed
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IP Management
ARM to have Strong IP management by:
Protecting its existing core IP portfolio
Creating IP in new domains
Expanding IP portfolio by acquiring smaller start-ups
Retaining high-quality R&D staff
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Summary
Time is ripe for ARM to enter the PC Processor market
Attractive Value Proposition
Value Proposition
Lower Cost
Longer Battery Life
Short Time to Market
Customized Design
Product differentiation
Opportunities to enter wider market
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Summary
Participate in the Vertical Disintegration
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Summary
Become a Key Part of the Value Chain
Microsoft Google Apple
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End