IBM to profit from console war

Chip

It doesn’t matter if Sony‘s PS3, Microsoft‘s Xbox 360, or Nintendo’s Wii will be the top seller. IBM will win this console war. There really isn’t a huge conspiracy behind this. Like any other war the guys who are selling the guns win. In the console war’s case, it’s microprocessors, not guns.

All three units use IBM microprocessors.

What’s amusing about this is that as recently as 2004, IBM was struggling to attract work outside of chip-making just to cover the enormous cost of manufacturing. Now due to the game-deals they have with the big three, IBM is expected to see a whopping $3.7 billion in sales of chips and associated design services this year.

All the expected bling won’t just come from the chips. Using the model IBM used for their consulting work for the big three, IBM formed a new technology-collaboration solutions unit that’s expected to post US$ 4 billion in revenue this year. Internal projections call for that division to earn around US$ 10 billion by 2010 and US$ 20 billion by 2015.

Given IBM’s tough competition in the PC world in the form of Intel, what IBM did is a smart sidestep. IBM’s Bernie Meyerson had this to say: “Most folks are not aware, that gaming chips drive the frontiers of the industry, not general-purpose computing.”

Via The Seattle Times

Chip

It doesn’t matter if Sony‘s PS3, Microsoft‘s Xbox 360, or Nintendo’s Wii will be the top seller. IBM will win this console war. There really isn’t a huge conspiracy behind this. Like any other war the guys who are selling the guns win. In the console war’s case, it’s microprocessors, not guns.

All three units use IBM microprocessors.

What’s amusing about this is that as recently as 2004, IBM was struggling to attract work outside of chip-making just to cover the enormous cost of manufacturing. Now due to the game-deals they have with the big three, IBM is expected to see a whopping $3.7 billion in sales of chips and associated design services this year.

All the expected bling won’t just come from the chips. Using the model IBM used for their consulting work for the big three, IBM formed a new technology-collaboration solutions unit that’s expected to post US$ 4 billion in revenue this year. Internal projections call for that division to earn around US$ 10 billion by 2010 and US$ 20 billion by 2015.

Given IBM’s tough competition in the PC world in the form of Intel, what IBM did is a smart sidestep. IBM’s Bernie Meyerson had this to say: “Most folks are not aware, that gaming chips drive the frontiers of the industry, not general-purpose computing.”

Via The Seattle Times

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