Something about margins I don't get: Intel's Gross margin is about 80%. In the fabless ecosystem, the fab usually gets 50% and quallcom is usually above 50% , something even 65% .
So the total combined margin is as high as Intel or more. So why does Intel fail?
All of these companies sell many different products and I'd guess that their reported overall gross margins will be different from the margins of any given product. For instance, I rather doubt that either TSMC or Samsung get 50% margins when making Apple's chips.
In Apple's case it makes sense to lower margins to increase profits.Just common sense. But why not in general ? why does Wall Street hates that so much ?
Benefits through competition? Intel is only one company, it's competing with a whole ecosystem of companies, who can all iterate and find efficiencies on chip design, and on manufacturing. And those improvements which are specific to the processor type will inevitably get passed around over time.
So the total combined margin is as high as Intel or more. So why does Intel fail?