Intel's Ivy Bridge: Aggressive launch, but a lot of wild cards

Intel's Ivy Bridge: Aggressive launch, but a lot of wild cards

Summary: Intel has a lot riding on the Ivy Bridge ramp. Are its targets too aggressive given the great wait ahead of Windows 8?

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Intel's Ivy Bridge processor---a 22nm leap---is set to hit laptops and perhaps the most aggressive thing about the launch is how aggressive the chip maker sees the ramp.

The company is expecting Ivy Bridge processors---a code name for what will be next-gen i3, i5 and i7 chips---to be 25 percent of the product mix in the second quarter and represent 50 percent in the third quarter. When Windows 8 gets rolling Ivy Bridge will dominate the product mix.

In other words, Intel's 22nm technology will ramp much faster than when the company rolled out 32nm chips. Intel is ramping 22nm fabrication plants (fabs) with three now and another on deck.

These targets are notable given that Ivy Bridge laptops are just getting rolling. CNET estimates the first laptops will hit the market April 29 and then it'll be high-end systems. Reviews are just landing, but the big question is whether consumers will bite.

As CNET's Dan Ackerman noted:

Besides Intel's new chips, it may also be worth waiting for Windows 8, or at least the free upgrade coupons we expect to see bundled with new laptops starting in late summer.

More from CNET: Ivy Bridge: The FAQ | Ivy Bridge PCs: The first wave | At long last, a credible 3D gaming chip from Intel | Our first Ivy Bridge laptops: how do they perform? | Intel's Ivy Bridge waits on Windows 8 | Asus Essentio CM6870 review | Origin Eon 17-S review | Origin Genesis review

Add it up and Intel's Ivy Bridge rollout will largely ride along with PC sales. The arguments are pretty strong for waiting until Windows 8 systems surface. New Mac systems will arrive with Ivy Bridge too.

Among the key wild cards for Intel's Ivy Bridge launch:

The great wait. Will consumers hold off on Ivy Bridge systems ahead of Windows 8? Probably.

Ultrabook malaise. Ultrabooks will drive Ivy Bridge units, but that category has underwhelmed. Piper Jaffray analyst Auguste Gus Richard said in a research note:

Ultrabooks are likely an ultrabust in our view. While Intel is enthusiastic about PC demand in 2H we are not. First, our contacts indicate OEMs are ordering early for back-to-school, pulling in demand from 2H. Second, while Ultrabooks and PC/ tablet convertibles sound like a great concept, iPad momentum does not seem to be slowing. Moreover, we believe Apple is working on an ARM-based PC. Ultrabooks and PC/tablet convertibles have a lot riding on Windows 8 that we expect it to be buggy and late.

The 22nm cycle won't be as lucrative for Intel. Gross margins for Ivy Bridge will be lower than the previous generation chips. Richard sees peak gross margins of 63.8 percent compared to 65 percent for the peak 32nm chips. Richard added:

It is likely Intel’s cost per acre of silicon is going up faster than revenue per acre silicon. Revenue per acre is not likely to go up as demand shift to tablets, smartphones and bandwidth speeds and away from PC and processor performance.

Evercore Group also cited worries about Intel's Ivy Bridge launch costs. Here's the money chart:

What happens if ARM-based notebooks gain momentum? If a Windows 8 ARM laptop becomes a hit that could lead to more. That reality would ding Intel's aggressive product mix targets.

Related:

Topics: Hardware, Banking, Software, Processors, Operating Systems, Networking, Mobility, Microsoft, Laptops, Intel, Windows

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19 comments
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  • Did I read this quote right . . .

    "First, our contacts indicate OEMs are ordering early for back-to-school, pulling in demand from 2H. Second, while Ultrabooks and PC/ tablet convertibles sound like a great concept, iPad momentum does not seem to be slowing."

    How could Win8 sales be slowing iPad momentum now when Win8 will not be available for months?
    rmark2
    • Simple

      Consumers often hold off on buying one expensive thing when they anticipate that another more desired expensive thing will be available in the near future. I might buy an iPad 3 today, or wait until later in the year and buy a Windows 8 tablet.
      RationalGuy
      • Wait for Wondows? Really?

        Why would you put up with the "sell no wine before its time" philosophy from Redmond when fresh carrot juice is available from Cupertino?
        z2217
      • Because Win8 is likely to fulfil more usage scenarios

        @z2217
        Even if it is more costly than an iPad, it is likely to be a more useful two year investment.
        Patanjali
      • Try to keep up

        @z2217

        rmark asked how Win8 COULD slow iPad sales. It's clear from sales figures that that it isn't.
        RationalGuy
  • Benchmarks

    Looking at the Ivy Bridges benches available on the net and I can still see that Intel still has no idea how to make a graphics core .It's terrible and would find it's ass bitch slapped by even a first gen AMD APU they might as well have left the graphic off because you'll need an add on card to do even the simplest thing well!
    wizardb9
    • Yes but way lower power.

      If you utilize the on-chip graphics core you get much better power savings than AMD's APU. And performance is way better than AMD on general processing. The graphics core is good enough for browsers and video (1080p) playback and some low demand games and for many people will be fine. General use: such as word processing, browsing and other applications will be faster than AMD's APUs and for hard core gaming the APU's aren't that great either, so you if you are doing real gaming then you need a serious discreet GPU in either case.
      DevGuy_z
      • Still doesn't make sense

        For those who haven't noticed - CPU horsepower is not the name of the game anymore. Even for gamers, mid to top of the line CPUs from either company are pretty adequate already - as long as they are coupled with enough fast memory and a good GPU.

        For the "average user", an AMD all-in-one is a better value proposition (A6), with enough power for office apps, and enough GPU for casual gaming. For the serious power user, a 3 or 4 core CPU from either company is good enough, but the Intel GPU is rubbish.

        It is remotely possible that you are someone for whom having a 10% faster CPU (or more than 4 cores) will make a difference, but for 99% of users, they will not be able to benefit, but the cost differential is significant. For example - if you spend a fair bit of your time compressing raw video files, then a couple hundred on the faster CPU might pay off in the long run. On the other hand - you may still get more bang from your buck using the GPU and special (often bundled) software to do the compression - in which case the CPU GHz won't matter.
        dimonic
      • "Much better power savings...."

        Yeah, and you get even BETTER power savings if you turn your computer OFF, turn off your lights, and take a hike. Somehow I doubt that a real gamer would be impressed.
        vizenos
  • I am waiting for next generaton processor from Intel

    Haswell will come next year, and much better.
    FADS_z
  • Not on Shelves Yet

    Checked Amazon and Newegg. No Ivy Bridge processors yet. I thought they would already have them stocked, and were just waiting for today to make them available. They've been around since the end of last year, but the OEMs pressured Intel to hold off until now.
    jpr75_z
  • Poisoned Ivy?

    It seems silly to have Ivy Bridge launch so far ahead of Win 8 which will be a great launching platform for Intel. Yes Macs could theoretically adopt them sooner, even though they did a Mac refresh less than 6 months ago, but PC's are still a massive majority of computer sales. They're doing themselves a disservice by having them ready to sell months ahead of Win 8 which many people are waiting to adopt for both tablets and desktop PCs. Don't believe that? Ask all the customers in tech stores why they aren't buying today. Many I've spoken to say they're waiting for a Win 8 upgrade guarantee of the preinstalled Win 8 machines. I'm looking more forward to AMDs next year in APUs. Those seem like better investments for ultrabooks with the value they provide.
    schroederrock
  • A Mac PC on ARM?

    Gus Richard said "...we believe Apple is working on an ARM-based PC...." I don't believe it. There are numerous software issues with ARM for Windows and for OS X. ARM is a dead-end for PCs. OS X can already run perfectly well on current low-power Intel chips in the MacBook Air. Ivy Bridge will bring even better performance to ultrabooks. The question for Ivy Bridge is whether it's good enough to use in tablets. It would certainly be preferable to use Windows 8 on a tablet with an x86 CPU rather than on an ARM, because you could use regular Windows software (and Mac software) on an Ivy Bridge tablet. There would be no compatibility issues, as there will be with software adapted for ARM processors (in addition to the development time if will take to bring software to an essentially new platform). Indeed, I've been wondering why Microsoft targeted Windows 8 for ARM tablets in the first place, given its inherent limitations, rather than waiting for a possible Ivy Bridge (or other x86) tablet CPU. Now it seems Ivy Bridge will arrive before Windows 8, so Windows 8 on ARM seems even more of a bad start.

    However, I have not yet seen or heard of an Ivy Bridge tablet, so it may not be as feasible as I think. Nevertheless, Ivy Bridge will make ultrabooks even more ultra, so there seems absolutely no reason for Apple to do an ARM PC. While Apple has bridged the compatibility gap between the ARM powered iPad and the Intel x86 powered Mac for certain of its own applications, and will take that compatibility even further with OS X 10.8, Mountain Lion, few third-party apps have crossed that bridge. And the iPad versions of apps on the Mac are poor relations at best. There is also the way iOS handles documents, which is significantly different from document handling on a PC. Even an ARM powered Mac would start out well behind the game in software. Speaking of software, a Mac on ARM would require yet another version of OS X, something between iOS and OS X on the Mac, yet another feasibility hurdle. Whereas, an x86-based Apple tablet could run OS X as it now stands - and most current third party Mac software. Thus it would hit the road running. In comparison, an ARM-based Apple PC would stumble out of the gate and keep on stumbling for years to come.

    There's also the fact that Apple showed nothing but contempt for netbooks. Steve Jobs expressed a strong bias for a usable keyboard, which sets a minimum standard for PC size. In other words, the only advantage an ARM CPU can give a PC is to enable it to be made smaller - smaller than Apple has deemed desirable up to now.

    I suspect what has led to the speculation about an ARM powered Mac is the fact that Apple took it's own ARM manufacturing in house. This has indeed streamlined the product pipeline for the iPad, iPhone and iPod touch. Given the inherent limitations for ARMs on PCs, however, I don't see Apple going that far. Manufacturing efficiency is only one factor and it hardly compensates for the software compatibility issues. Then there's the fact that Apple already has the original and best selling ultrabook on the market. Ivy Bridge will only make the MacBook Air even better. Other ultrabooks may be selling sluggishly, but the MacBook Air is still flying off the shelves.

    Now I admit I have no pipeline into Apple's plans, and they are entirely capable of doing the unexpected. But I would consider an ARM powered Mac to be a mistake on the same order of magnitude as the ARM powered PC (which the fate of netbooks clearly demonstrates). Until Apple shows me the error of my ways, I remain unimpressed by pundit prognostications about ARM on the Mac.
    thewhitedog
    • "..........why Microsoft targeted Windows 8 for ARM tablets........"

      I think that when they initially took that decision it was in part intended to give Intel a monumental kick up the ass and force them to increase their pace with regard to resolving the processing power/power consumption equation for x86 chips. Microsoft badly need there to be "Wintel" tablets with both good performance and good battery life available (particularly for the enterprise sector) in large numbers as early as possible in 2013. I think that throwing a scare into Intel was aimed at facilitating that goal.
      FrederickLeeson
  • Partly agree with Piper Jaffray

    Most consumers have never heard of Windows 8, so we need to stop looking through tech nerd colored glasses. Ultrabooks are going to be a bust because consumers are enamored with tablets (not necessarily the iPad, considering its market share slide).

    Ultrabooks are priced much higher than tablets, which explains the difference in consumer interest. x86 hardware today just cannot compete with ARM on price.

    http://www.tech-thoughts.net/
    sameer_singh17
  • Piper analyst bias for Apple and against MS

    By stating "we believe Apple is working on an ARM-based PC" and "Windows 8 that we expect it to be buggy and late" indicates that they are ready to bet on a totally imaginary and unannounced Apple product rather than the ahead-of-schedule and stable delivery performance that MS demonstrated with Win7.

    And they expect to be taken seriously!
    Patanjali
  • Nobody is waiting for Windows 8

    You can hype that all you want to, but there is absolutely nothing in Windows 8 for a business or consumer desktop or laptop that is of even mild interest. Nothing. If Windows 8 isn't being installed on a touchscreen desktop or a touch enabled tablet there is practically zero reason to wait for it whether new chips are coming out or not.

    It's just not a selling feature and I bet a lot of people who get Windows 8 pre-installed on their non touch PC's will instead want a coupon to be able to go back to Windows 7. Metro will confuse the hell out of people.
    CaliRockin
    • i see

      I see that you know nothing about anything. Must be very fustrating... Try reading the building windows 8 blogs.

      I could tell you around 20 new features that are very good, but i won't wast my breath (fingers?) as it seems you are just a fan boy who repeats what he hears from other fan boys..
      danjames2012
      • Don't take it the wrong way

        I'm an old Microsoft user all the way from the 286 days to the present. I made a Hackintosh on a HP laptop last year and was very underwhelmed with the OS.

        I also am involved with retail customers in a consumer computer area.I don't think my guess as to how the average user will react to Metro is off the mark at all. Many people commenting here are way more involved either professionally or as enthusiasts than the average computer user is. So I think it is easy to overestimate how the average person will perceive the benefits of Windows 8 features. In about 2 years go and ask the average Windows 8 user how they have liked the new storage spaces feature in Windows 8. The answer you will get is "what's that?".

        What I really mean is that Windows 7 is an outstanding OS for most uses, especially for the drones in the office and as a platform for the music, games pictures streaming video type of home users.

        When you have paid for that OS as a part of your latest machine (or machines in a business) there is mighty little justification for the added expense of upgrading existing machines at a cost of around $100 per machine.

        The people who get Windows 8 with their new computers will be the real test bed and I venture to guess that I am correct in my prediction that most people will find the Metro interface a useless annoyance, and wonder where the heck the list of programs and system utilities and accessories are located. I predict a Vista-like response, as in how do I get Windows 7 back on my computer. We'll see.

        And as I said, the Metro interface is just going to be a useless annoyance to both the business and consumer markets who cannot take advantage of its primary purpose which is to provide a natural interface for touch enabled machines. I have used Windows 8 regularly for some weeks now and I just don't find the interface relevant to a machine without touch capabilities. As they say,"If it ain't broke don't fix it".

        I think Microsoft, regarding desktops and laptops without touchscreens, is trying to fix something that isn't broken.
        CaliRockin