How many ARM chips will the average consumer buy in their life? How much profit will ARM make on each of those chips? How many Tiktok videos will the average consumer watch in their life? How much profit will Tiktok make on each of those views?

ARM doesn't manufacture chips, they license ARM Processor 'designs'.

ARM is more of a household name for their use in mobile phones but that is just the tip of the iceberg.

I think you underestimate how many ARM chips you have in a single car or delivery truck.

Add to that:

- farming machinery

- construction machinery

- factory line automation

- elevators, escalators

- EV chargers

- fridges, washing machines, ovens

- medical devices such as drug-infusion pumps, ventilators, surgical machinery, etc.

- Auxiliary modules in aeroplanes and shipping containers.

- Infrastructure for Road, Rail, Power Grid with ARM processors running headless embedded systems

- Anything the size of a pebble with bluetooth connectivity uses nordic's nRF chip (which is yet again an ARM chip)

ARM processors are hiding in plain sight in the world all around you.

I understand the point you make, from a business standpoint, on how Tiktok might scale. The thing that is bizarre for me and I agree with the parent's sentiment, is how disconnected the valuation is from the real-world impact and objective _usefulness_ of ARM versus Tiktok.

Edit: bullet points

> The thing that is bizarre for me and I agree with the parent's sentiment, is how disconnected the valuation is from the real-world impact and objective _usefulness_ of ARM versus Tiktok.

Also how easily the technology behind Tiktok can be duplicated compared to ARM.

Anyway, it's probably all about the network effect and brand value.

ARM has no exposure to any end consumers and takes the tiniest sliver from each sale—if anything at all.

Tiktok can deliver arbitrary content to hundreds of millions of people’s eyeballs around the planet.

ARM processors are also in pretty much any storage device like hard drives too.

Also Intel ME and (not sure, but probably) AMD PSP.

The ME runs on an ARC chip, not ARM.

It did run on ARC, but now it's just a 486.

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.

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

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.

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.

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.

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.

Something like Tiktok can myspace in the blink of an eye. Established CPU architectures have enormous staying power.

MIPS sure didn't, same for SPARC. CPU architectures can effectively die in a handful of years just like MySpace, Delicious, Digg and such.

MySpace is dead, dead. You'll still find devices, especially in manufacturing, that are still running on a MIPS, and are essential to the process. You'll still find them in various cheap toys on the shelves.

MIPS _should_ be dead, half the manufacturers of the chip have stopped. But, Imagination Technology still sell a considerable number to Apple every year.

Even decades after starting to decline both are still less dead than the average former social media fad.

I have more Arm CPUs in consumer devices within arms reach at this moment than the number of Tiktok videos I’ve seen in my entire life.

Other people watch more TikTok videos in a single day than the number of ARM consumer devices that you've owned in your entire life.

But if we are doing nonsense comparisons let’s use the number of ARM clock cycles for devices you own.

The sheer number of TikTok videos that have been watched on an Arm device. Arm soon to rebrand as TikArmTok.

It’s not nonsense - Arm gets paid per device, TikTok get paid per ad impression (and views are a good proxy for that)

But the pay for each of those is orders of magnitude apart.

Here's an estimate of ARM's revenue per chip at 10 cents (profit maybe half that).

[1]https://qz.com/741078/a-company-that-doesnt-really-make-chip...

Here's an estimate of youtube (not exactly tiktok, but not exactly not), revenue at 10 to 30 cents per view.

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

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

that article makes me wonder if the beos would have survived if they switched from Hobbit to arm chips and stuck with selling hardware+software, and later on added x86/x64/PPC/POWER. A tight integration of hw+sw has worked for apple.

My guess is no.

I loved BeOS, but there was an even more fundamental problem that put a limit on its days: A failure to anticipate coming need for home computers to become more secure. At the same time that Microsoft and Apple were both working frantically to ditch their old single-user desktop operating systems and replace them with, in effect, spruced up versions of existing server/workstation operating systems, Be was trying to launch a brand new OS on the dying model. Had they survived even a couple years longer, they would have had to reckon with that, and they simply didn't have the resources to navigate such a fundamental transition.

Compared to the number of pixels * the number of video frames displayed by Tikki…

They watch those TikTok videos on devices powered by ARM SoCs.

Same here, which makes neither of us an “average consumer”.

By this logic, TicTac should be worth more than all car manufacturers combined, since there are more TicTacs in an 1$ pack than I will ever buy cars in my entire life. And I'm sure their margin is much higher, percentage-wise, at least compared to most car manufacturers.

Let's be real here: TikTok is a big social network, yes, but ARM owns most of the embedded market. Every smartphone your average consumer buys runs an ARM chip. And hardware is harder to replace than software.

Car manufacturers make about $2k per car. Do you buy 2k packs of TicTac every 10 years?

Maybe ARM should copy the business model of more valuable companies like TikTok by harvesting and selling it's users data. Surely the data flowing through a SOC is worth something.

> How many Tiktok videos will the average consumer watch in their life?

This number is not unbounded. It will converge to some asymptotic limit.

> How much profit will Tiktok make on each of those views?

Around a tenth of a cent per view.

These huge valuations are purely because people don't do the math and don't know how the market works.

Considering Apple is moving their desktops to ARM and pretty much all iOS devices are ARM...

What if giphy was worth 100x ARM, would it be interesting then?

It is quite simple really. You seem to be under the mistaken impression that valuations in tech are based in any way on logic. They're not. They're completely hype-driven.

That's how this year's myspace, which people will have trouble remembering 5 years from now, can get a higher "valuation" than a large semiconductor company with a 30 year track record.

Investors and the financial sector are proving time and time again that they're unable to learn from their mistakes, through no "fault" of their own, because apparently it's human nature to just be horribly bad at this.

It amazes me that people think investors somehow learned anything from the dot-com bubble, given they've been repeating all of their other major mistakes every odd year or so.

... Meanwhile Microsoft is busy buying Tik-Tok (eye roll)

Source? Didn’t hear this was happening

Edit: https://www.businessinsider.com/microsoft-tiktok-donald-trum...

This is some very fresh news.

Microsoft buying ARM would be interesting.

I don’t want no ads on me CPUs

The flawless execution of these instructions has been sponsored by RAID bug spray.

RAID-5 bug spray, presumably?

now with extra parody!