The natural death of monopolies

I know a lot, I will foresee the fate of powerful glorious gods.


Two of the most famous monopolies in the IT business - Intel and Microsoft came close to the edge. In a couple of years, we will begin to observe the breathtaking sight of their fall into the abyss.

Most likely, they will not disappear from the face of the Earth, however, will cease to play the role of the undisputed leaders in the field of operating systems and processors for home computers and servers. In just five to seven years, the Wintel platform (Windows on Intel) will be perceived not as absolutely dominant in its field, but as a textbook example of the inability of monopolies to adapt to new realities in a rapidly changing world.

About seven years ago, a quiet and almost imperceptible revolution took place in the world of processor developers. ARM has announced its new Cortex A8 processor. In the same year, ARM first entered the top ten most influential players in the global IT industry.

I began to understand the significance of what was happening only three years later, and it was not until the fall of 2009 that I first decided to publish my point of view. He was completely criticized and even ridiculed by some opponents - not at all the last experts in our field. Two and a half years later, even my most ardent opponents already admit the possibility of such a development of events.

There are several obvious trends in the development of consumer processor markets. Interestingly, all of them are approaching explosive growth in 2014. 2014 will be the year of a great turning point, when the trend will become apparent to everyone and only a miracle can save Intel and Microsoft from losing their former greatness.

The first trend is the miniaturization of computing systems and the desire of users for more and more mobility. I bought my first laptop somewhere in 2001. It was very difficult (something about 3 kilograms) and was seriously inferior in performance to my desktop computer, it could live on the battery for no more than 2 hours. For five years I lived in parallel on two systems - one for work, the other for mail and the Internet while traveling. In 2005, I abandoned the desktop and began to use only a laptop for all applications. It was not yet as productive as the desktop, but mobility was more expensive. The weight decreased to 2.4 kg, the battery life increased to 3 hours. By 2010, my laptop lost in weight up to 2 kilograms, the battery life increased to 7 hours, the performance was equal to the desktop. In 2012, an upgrade is coming for a model weighing one and a half kilograms and a life time of 10 hours, performance will not suffer. I will never return to desktops, although I will not stop using an external monitor and keyboard either. I think that this trend is not a secret for anyone.

The second trend is the development of the smartphone-superphone market. I picked up my first smartphone in 2002. Oddly enough, it was a phone from Intel on the StrongARM processor (XScale). The name of the processor is clear - it was on the ARM core! It was a reference design, so it looked rather strange - gray, rough plastic, the size of a medium format book, a pound and a half in weight, the batteries could not be placed inside the case, so they hung on the wires outside, the display was 320x240. Then I showed it to some of the journalists, called it the telephone of the future, they did not believe me :-). But from the point of view of the processor, it was a real smartphone - the PXA250 overclocked to 400 MHz and had almost full support for MMX instructions. Intel's management failed to discern a quiet revolution (as I did at that time) and sold its entire XScale line to Marvell Technology Group in the summer of 2006. Current smartphones have come close to netbooks in terms of processor power - a dual-core 1.5 GHz processor with full HD video support, an external monitor, keyboard and audio system. In the past, CES (January 2011) they came up with a name - a superphone, I don’t know if it will take root. 2012 models will already be 4-core with a peak frequency of 2 gigahertz, vector coprocessor and powerful graphics. And in 2013, smartphones with processors based on the ARM Cortex A15 are expected, five-core, with a clock frequency of 2.5 gigahertz. In general, the trend is also understandable. 5 GHz with full support for HD video, plug-in external monitor, keyboard and audio system. At the last CES (January 2011), a name was coined for them - a superphone, I don’t know if it will take root. 2012 models will already be 4-core with a peak frequency of 2 gigahertz, vector coprocessor and powerful graphics. And in 2013, smartphones with processors based on the ARM Cortex A15 are expected, five-core, with a clock frequency of 2.5 gigahertz. In general, the trend is also understandable. 5 GHz with full support for HD video, plug-in external monitor, keyboard and audio system. At the last CES (January 2011), a name was coined for them - a superphone, I don’t know if it will take root. 2012 models will already be 4-core with a peak frequency of 2 gigahertz, vector coprocessor and powerful graphics. And in 2013, smartphones with processors based on the ARM Cortex A15 are expected, five-core, with a clock frequency of 2.5 gigahertz. In general, the trend is also understandable. with a clock frequency of 2.5 gigahertz. In general, the trend is also understandable. with a clock frequency of 2.5 gigahertz. In general, the trend is also understandable.

The third trend is the friendly user interface. I think that all IT specialists are familiar with the situation when their relatives and friends sing the same song - well, why do you computer scientists make such incomprehensible programs, it’s absolutely impossible to figure out how to handle these computers of yours ...
And so it happened - the lamers sighed with relief, picked up the iPad, so as never to return to the study of computer literacy based on Windows. A little more time passed and a new wave of inexperienced PC users began to master the numerous pads, tabs and Kindles running Android. I want to note that iOS (iPhone, iPod, iPad) is Unix Free BSD, Android is Linux, and the listed devices work on processors from various companies, but all are based on the AWP kernel. In short - all the systems normal from the point of view of inexperienced users are built on the Linaro platform, and not on the Wintel platform. And nothing portends change.

Fourth trend - the number of developers specializing in programming mobile Linaro platforms is growing an order of magnitude faster than those involved in Wintel development. Three years ago, a programmer who knew iOS was a rarity, today they write for various mobile platforms almost as much as under Windows.

The fifth trend is the mass transition of processor developers to the ARM core. I will not bore readers with technical details, I will name only a few companies that make their processors on ARM: Texas Instruments, Samsung, Arple, NVidia, Freescale, Qualcomm, ST Micro, NXP, Marvell. Each of these companies is smaller than Intel, but all together they are significantly larger, and in addition, they all increase processor output, and Intel is practically standing still. Qualcomm last year exceeded 14 billion annual sales and outperformed TI, becoming the world's second-largest processor manufacturer. Samsung, according to April 2011, released over 4 years 170 million processors for Apple iPads, pads, backgrounds.

All of these trends tend to significantly increase in 2014. According to my estimates, in 2014, new computers (both PCs and devices that came to replace PCs) will be based on ARM-based processors in 20% of cases, and various * nix systems will be used as OSes.
IDC analysts are not so categorical, last year their assessment was 15% and not by 2014, but by the 15th year. In my opinion, they are simply overestimating the possibilities of adapting Intel and Microsoft to new realities.
I want to make a reservation again, this is not just about servers, desktops and laptops, although there ARM will take several percent. It is mainly about those systems that will replace modern computers and laptops. Pads, tabs, superphones and other Kindles instead of laptops and desktops, gaming and multimedia set tops - to replace gaming PCs and home computers.

I think that the computer industry as a whole will not experience too strong growth - mainly due to the younger generation. Those who do not own computers are being replaced by a new generation that uses them. And, first of all, this generation will master new devices, and not traditional PCs. As a result of small market growth (~ 10%) and the loss of its significant share (~ 20%), according to the results of 2014, Intel and Microsoft for the first time in many years will show a decrease in sales, possibly even losses. But how this decline will turn into a fall depends on how quickly and efficiently new manufacturers of processors and operating systems will be able to agree on standardization of approaches.

Many of my opponents ask: why do you think that Intel is not able to make a chip for mobile devices? Yes, and Microsoft announces a mobile version of Windows 8. The answer is simple - monopolies always lose in free markets. Throughout the history of attempts to play in these markets, neither company has achieved any success.

Intel started in 1997 with the purchase of StrongARM, and is still investing heavily in the development of CE series media processors. The first known CE2100 was still on XScale, in 2005, then it was 3100 on Pentium M in 2008, in 2009 CE4100 was announced on Intel Atom. In 2012, 5100 will appear, again on the atom, but it will face the same fate as its predecessors.
Microsoft entered the market with its Windows CE (Consumer Electronics) as early as 1996. The last, seventh version appeared in March 2011. Her other incarnation is called Windows Mobile, her fate is the same, despite a different name. The third incarnation appeared in 2010 under the name Windows Phone and has not yet died, but is also looking for incense. According to Gartner, by the end of 2011, WP occupied about 1.6% of the smartphone market and was in 6th place, even letting the Samsung badafon go ahead. About there and stay.

What do they do? The answer is very simple - stop being monopolies, split into several independent companies. Some of them will die, and some will integrate into the competitive market, take their own 10% on it and, perhaps, will someday grow to the level of a new monopoly. And then he will die, for the same reasons.

Such is the fate of all monopolies. And this, comrades, fills us all with inexpressible bliss.

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