Comment by kelnos | Hacker News Reader

Comment by kelnos | Hacker News Reader

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Per-video profit isn't really meaningful; these kinds of companies report revenue (and thus profit) base on the number of active users.

Consider that in 2017, 21 billion ARM chips were manufactured (doubled in 4 years, from 10 billion in 2013), and that ARM's licensing fees are over 2% of chip cost for current high-end designs (and they're talking about raising that even more). They have 95%+ of the mobile phone market, are making inroads in the server market, and will soon be in every Apple laptop, which I expect will grow the market for ARM laptops even outside Apple. It wouldn't be a stretch to find them in common desktop computers after that. They're in smart TVs, washing machines, robot vacuum cleaners, and all other kinds of smart (and non-smart) appliances. Even SSDs have their own embedded ARM chip. And that's just home/consumer stuff; haven't even scratched industrial/commercial applications, of which there are a ton.

I could easily see yearly production at over 100 billion chips before 2030, probably even before 2025. While I'd love to see something like RISC-V take off commercially, I don't think that's realistic.

Meanwhile, social media users are incredibly fickle; platforms are subject to fad and fashion. Certainly Facebook and Instagram are still huge behemoths, but their growth is nothing like it once was, with people -- especially younger people, trying to distinguish themselves from their older, boring relatives -- flocking to TikTok. I fully expect TikTok will be in Instagram's boat in under 10 years, with some other platform taking its place.

ARM seems like an amazingly great short-, medium-, and long-term bet, while TikTok feels like a nice short- (maybe medium-, if they're lucky) term money-maker, and even that feels like a big maybe: I have no idea what their ad revenue per user looks like, but it's probably not great since their audience skews younger. Teenagers and college kids don't have much in the way of discretionary income. Then again, TikTok doesn't pay their creators like e.g. YouTube does, so they get to keep all that ad revenue.

21 billion is 3 per person per year for everyone in the world, including rural goat herders etc. who don’t consume very many. I don’t doubt the number but it’s still wild.

TikTok is doubling every one year, and is getting around one billion views per day. I'd imagine that TikTok's growth over the next five years is going to be both faster and larger than ARM's. ARM makes around the same per chip (10 cents) that Youtube is making per view.

Now, certainly TikTok might not be sustainable and might disappear off the face of the earth tomorrow. Or it might become a juggernaut that overtakes Facebook.

Do you have a source for the cents per view on YouTube?

> Google pays out 68% of their AdSense revenue, so for every $100 an advertiser pays, Google pays $68 to the publisher.

> The actual rates an advertiser pays varies, usually between $0.10 to $0.30 per view, but averages out at $0.18 per view.

https://influencermarketinghub.com/how-much-do-youtubers-mak...

$18 divided by a thousand is 1.8 cents, not 18 cents.

This also is only people that watch the whole ad.

Oh! That is quite the mistake. It does look to be more on the order of cents per view.

Sorry, this is wrong by an order of magnitude. Youtube is making more like 1-3 cents per view.

If you don’t see RISC-V taking off commercially, then why is ARM trying to sell? I ask because my understanding was that they were trying to exit because of RISC-V.

If you see that is one of the options I don’t think Nvidia did not see that possibility as well. Yet they still plan to buy ARM.

I think it's just trying to sell because Softbank is a venture capital company, they only care about short-term profits.

PS I applaud RISC-V but it won't take over the market for a long time, and it wouldn't drive ARM out completely, I'm sure. Intel's had many competitors and they're doing just fine (even despite screwing up repeatedly with their processes!)

Look at all the failed attempts to move away from x86(/64). Even intel tried it with Itanium and failed, HP has to pay them to keep making it so they can fulfull their server contracts. I'm sure ARM has a similar hold on the mobile market.

> Intel's had many competitors and they're doing just fine (even despite screwing up repeatedly with their processes!)

With AWS offering ARM systems, all the Chromebooks, Apple, the complete loss of the phone market, Intel’s staying power is about to be tested to the extreme.

Most of those don't matter and didn't matter anyway: Chromebooks and Apple desktops are a tiny portion of a small market; Apple's volume chips are iPhones. Intel never really had a grip on any kind of mobile handset market and hasn't for years, despite that they still post record profits. That's because the margins on handsets are very slim, unless you're Apple.

The only actual major change here is AWS offering Graviton, which actually hints at their real cash cow: datacenter SKUs with absurd markup. Something like 80% of their profit margins are here. More accurately, the change is that there are now viable silicon competitors to Intel in the performance department. So it's now clear that ultra-integrated hyperscalers who can actually afford tape out costs (7nm CPUs are not cheap to produce in volume) have an option to vertically integrate with e.g. Neoverse. Smaller players will not do this still, because alternative options like Rome will be adequate. But the only reason any of them are changing anything is cost savings, because now there are actual viable competitors to Intel when there were zero of them for like, 15 years. Producing cutting edge silicon products isn't easy, but it's very profitable, it turns out.

To be clear, Intel isn't charging $10,000 for a Xeon Platinum because it costs $9500 to make and they make $500 in profit. (Likewise, AMD doesn't produce competitors at 1/5th the price because they made a revolutionary, scientific breakthrough in processor design.) They're charging what you'll pay, not what it takes to produce. Seeing as they currently still have a complete stranglehold on the datacenter industry and make more in a quarter than most of their competitors do in several years, I suspect they've got much more "staying power" than the watercooler chat on this website would lead you to believe.

Softbank had a bad year and is in need of cash not to collapse.

Softbank is selling ARM because they are broke.

The Softbank guy invested a ton of money on WeWork. Tried to sell WeWork for 60 billion, but before that happen WeWork valuation dropped out to 2-5 billion (huge loss). That was in 2019. Afterwards, Softbank invested another 10 billions to try to save it. WeWork owns and also pays rent or hundreds of office buildings in the most expensive zones of all the major capitals in the world. 2020 COVID now means these super expensive offices are now empty, since WeWork customers pay a premium to be able to cancel their leases in <1 week. So essentially, WeWork is broke, worth 0, and Softbank has lost dozens of billions on it.

On top, Softbank owns a huge chunk of Uber, which is also worth close to zero now that people are not travelling due to COVID...

So... yeah... Softbank is selling ARM because they must. They are super broke, and investors are going to pull the money that remains out. Selling ARM and giving investors a tiny benefit so that they keep their money is better than them taking a huge loss this year.

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