The technical advantages of ARM aren't that great.
Don't forget we are talking about CPUs that are getting close to Pentium 3 class performance. Intel proved back in the Pentium vs PowerPC days that x86 can compete well against superior architectures. In this fight they have a lot more performance to work with.
I do agree with your CPU-becoming-commoditized point, but Intel is very aware of that (cite: how they keep Atom performance just enough higher than ARM, but a lot slower than their more profitable higher end chips). It's a difficult area, but Intel is aware of the balancing act they have to do. I think their strategy is to increase performance of non-CPU components of their chipsets (ie, make sure Atom kills ARM on I/O) in order to keep their lead in the datacenter.
PowerPC owns gaming. MIPS seems to still be common in networking devices. ARM is mobile and the rest is Intel and noise.
Seems to me that the killer feature ARM has isn't technical at all, it's that you can buy a core, graft on a DSP if your core doesn't have one (OMAPs already do) and your secret sauce needs a DSP (half the phone vendors have their own audio enhancement stuff or echo cancellation code that they think makes the difference) graft on a mobile chip and fab your own part. Then you add memory, flash, a battery and you've pretty much got a phone.
I'm not aware of any medium volume products that use custom Intel based hardware, I have no idea what the costs or terms are but I'm under the impression that unless you're going to make 5million chips, it's just not worth it with Intel parts. Now say intel opensourced an SSE echo killer and built some kind of 2watt Atom with GSM built in style chipset and it cost $15, I bet you'd start thinking ARM was in trouble.
Intel can pretty much build the highest performing per dollar chips, they can build them cheaper than anyone else, they have much more reliable processes than anyone else and they've shown time and time again that when they put their mind to it they can compete with anyone else.
I'd need to see some really compelling evidence that ARM was moving in to the serving market in any meaningful way. I thought they had a match with PowerPC, thought so with AMD, thought Linux was going to make alternative platforms viable, and probably thought they were in trouble several other times but they are fiendishly good.
However, if x86 has neither a process or a compatibility advantage, then even a tiny technical disadvantage turns into a tiny extra cost, which can be important for high volume chips.
However, if x86 has neither a process or a compatibility advantage, then even a tiny technical disadvantage turns into a tiny extra cost, which can be important for high volume chips.
Not true.
The marginal cost of pretty much anything on a chip itself is close to zero. For example, most 3 core chips are actually 4 core chips with one disabled. Putting the extra silicon on the chip is effectively free.
The money goes in the investment in the factory and the R&D, NOT the raw materials or production costs.
Putting the extra silicon on the chip is effectively free.
If you need that silicon to actually work, then it's not free. Floor-sweeping is necessary because the more stuff you put on a chip, the more likely it is to have defects. That really is an extra cost. I don't think there is any way around that.
Ok. Yes, there is extra silicon. But it's so insignificant that it doesn't matter.
But I think you are overestimating how low-end these chips are. See http://arstechnica.com/gadgets/news/2008/02/small-wonder-ins... for example, which shows that the Silverthorne architecture (1st Gen Atom) has pretty much the same transistor count as a Pentium 4.
No one thought that the fact the Pentium 4 had to support x86 was a significant factor vs other architectures. For the chips we are talking about, the cache memory takes more transistors, so the quality thing is pretty insignificant too.
Don't forget we are talking about CPUs that are getting close to Pentium 3 class performance. Intel proved back in the Pentium vs PowerPC days that x86 can compete well against superior architectures. In this fight they have a lot more performance to work with.
I do agree with your CPU-becoming-commoditized point, but Intel is very aware of that (cite: how they keep Atom performance just enough higher than ARM, but a lot slower than their more profitable higher end chips). It's a difficult area, but Intel is aware of the balancing act they have to do. I think their strategy is to increase performance of non-CPU components of their chipsets (ie, make sure Atom kills ARM on I/O) in order to keep their lead in the datacenter.