Originally Posted by backtomac
The problem I have with IBM 'breaking into' a new market is their desire to be profitable from the outset. From a shareholders perspective that may be a bad thing, who knows how the Xbox franchise will turn out. However, can you see them sustaining the losses that MS is in the Xbox, to get into a mature market like mobile chips? They already have a lot of the pieces in place and may not loose as much as MS in gaming but still seem adverse to taking a loss in the short term for a potential long term gain.
That's a tough one.
The only competition IBM had for the game market was Intel. They won that fight.
But it was only three companies in the business, two of which were with them from several years before. They only had to pull MS into the fold. They did have a history in the gaming chip business.
Whatever losses MS, and Sony as well, are having, don't affect IBM. They get paid for their chips. As game chips aren't R&D'd much after they are released, it's much easier to profit from them. They are doing a die shrink, but the cost for that isn't much in the overall cost structure. After the shrink, the chips will cost less to produce, so IBM gains there as well. These chips will be around for four, or so, years without major changes. Oo la la! Profits!!!
But in the mobile area, particularly the phone market, the situation is entirely different.
They have no history there. They therefor have no current customers that could influence others to, by example, give them a shot.
There are a number of companies up and down the alphabet who have been producing chips and chipsets for that market, and who do have a customer base. They also have many patents.
This market moves quickly. New parts are being produced all the time. The likelihood that IBM could produce, from nothing, a clearly superior chip with supporting chips, API's, and corresponding, compilers, and libraries, all at once, is almost impossible to envision.
I think that IBM has enough on its foundry plate now, so that it isn't something they would want to tackle.