PART 2 — The Disruptive Story of ARM

The Beginning

ARM’s disruptive journey started out as the go-to platform for mobile processors. The story dates back to the mid-80s (worth reading it!), but with the actual company forming in 1990, that’s when the name Advanced RISC machine was born. One key takeaway, already foreshadowing the potential “we achieve high performance, low code size, low power consumption, and low silicon area”. It’s harder to create software, and by the early 90s, Intel already had the desktop computing market and was on the verge of getting the same dominance in servers (DEC, IBM mainframes, Sun were the key players in the 90s).

The Short Story

ARM and Intel were suppliers too for early smartphones. With early I mean pre-iPhone era smartphones. I can only guess, but probably a low number of shipments, constant innovation pressure, too much competition, and a not so bright future made Intel decide to quit the mobile processor game. Playing from Christensen’s book. The market is small, and the prices are low. Either they couldn’t predict future growth or didn’t care at all. Or thought that when the market is large enough, we can still use our huge pile of cash and exclusive partner positions to negotiate great deals.

Factors for Success

The advancement in the manufacturing process was made available by the large number of equipment that uses ARM processors. Almost exclusively, every mobile system uses ARM processors. Why does it matter?

What fueled this growth?

ARM was from the start the processor with lower consumption potential due to the architecture. Besides, ARM opted to license to multiple manufacturers and processor designers (Apple being one designer, TSMC one manufacturer), fueling innovation in the fabrication process and competition in price.

Conclusions

Even though Tesla is not an incumbent player, they are preparing for a lot of potential market changes. Autopilot and no car ownership for car-sharing future. Two-way energy usage for grid-independent energy storage. Focusing on software instead of mechanics. These are all independent games or markets that Tesla can step into and holds in its crosshair.

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