Moore’s Law means that cellphones 10 years from now will have the power of today’s Macbook Pro. For anybody not doing professional media editing, scientific computing, etc., that seems like more than enough.

I think the growth strategy for Intel is smaller form factor x86. But there is margin crunch. To offset that they need software revenues. Look at QCOM market cap vs INTC market cap – $73B vs $93B – who works harder and has higher capex on core technologies. Somebody has to fund that.

With 32nm intel is going to breakaway not just on lithographic nodes – but perhaps on leakage and other characteristics that are critical for low powered devices. But that won’t be enough. They will need to offset the margin compression with software revenues and IP like model (where QCOM has been successful). This is a culttral change for the company – but one they have to do.

WindRiver acquisition portends that aspect for embedded systems. Why give $50 to Microsoft for Netbooks. Netbook can truly cause a new platform to emerge as you outlined in the other post particularly with a carrier channel and backend infrastructure. I think increasingly the chip sale will be bundled with other margin contributing IP (be it software or other IP) to offset. The right number is perhaps $10 of software than can be bundled with a netbook – what is that software look like and who is going to get it? No Microsoft. Not Google. Intel??

Dell offers Ubuntu as an alternative to Windows. That didn’t go any where.