Sorry for the self promotion, but here is a blog post that argues that the latest microprocessors now overshoot the needs of the vast majority of customers and how this spells trouble for Intel: <a href="http://www.fernstrategy.com/?p=229" rel="nofollow">http://www.fernstrategy.com/?p=229</a>. I've appended the key parts of the blog post below for convenience:<p>In 1965, Gordon Moore, the co-founder of Intel, proposed that the number of transistors on a chip (forming a microprocessor) would double approximately every two years (Moore’s Law). Transistor count is important because the number of transistors on a chip affects a microprocessor’s performance; i.e., the number of instructions performed within a given period of time. For the last 45 years, this doubling trend has continued unabated, and the latest generation of microprocessors from Intel contain about 2-billion transistors. Now combine this rate of technology development with the movement towards cloud computing. Cloud computing reduces the need for high performance (bulky and expensive) computers at every desk because complex processing tasks can now be handled remotely. In short, the rate of technology development combined with the advent of cloud computing has given way to microprocessors that now overshoot the needs of the vast majority of customers. Because many customers are content with older generation microprocessors, they are holding on to their computers for longer periods of time, or if purchasing new computers, are seeking out machines that contain lower performing and less expensive microprocessors. The result for Intel is lower revenues and profitability.<p>The next issue for Intel is that cloud computing is facilitating an entirely new crop of mobile computing devices, such as netbooks, tablets, and smartphones. The issue for Intel is that many of these mobile devices use the ARM architecture, a competing technology that is more energy efficient. And it’s very difficult for Intel to compete directly with ARM because of ARM’s unique strategy. Unlike Intel, ARM does not produce and sell microprocessors based on its technology; rather it licenses the technology to companies. If Intel were to follow a similar strategy, its revenues and profitability would drop significantly.<p>In sum, Intel is facing a big squeeze; as Intel’s revenues and profits are getting squeezed at the top because the average customer no longer needs or wants the latest generation Intel chip (due to Moore’s Law and cloud computing), it’s also getting squeezed at the bottom as OEMs of mobile devices are adopting the ARM architecture in droves. And, like many disruptive technologies, the ARM architecture is now moving up-market, beyond mobile devices. For instance, the company “Smooth-Stone” recently raised $48m in venture funding to produce high performance, lower powered chips based on ARM technology to be used in servers and data centers.