Intel and Nokia have more than a few holes in their respective collections of mobile technologies. How far will the collaboration announced Tuesday go to plug the holes and take them to the next technology plane?
Intel senior vice president Anand Chandrasekher
(Credit: Intel)A platitude easily missed in the announcement may be the most revealing statement. Simply, that the two companies create the opportunity to take advantage of each other's expertise.
Nokia makes mobile phones. Intel, the world's largest chipmaker, can't get its chips into mobile phones. On the other hand, Intel makes the silicon that powers the world's PCs. Nokia doesn't have a clue about PCs.
The announcement won't necessarily inspire confidence with its lack of product particulars, but that's not what it's about. "Today is a relationship announcement," said Jeff Orr, senior analyst for mobile devices at ABI Research.
Intel and Nokia are simply agreeing at this stage to collaborate rather than be direct competitors, according to Orr.
Nokia was clear--in a cryptic sort of way--on one point, however: "Today's collaboration is not about smartphones but creating a new class of devices," Kai Oistamo, executive vice president for devices at Nokia, said in a phone interview Tuesday.
Beyond those future devices--presumably powered by Intel silicon--what does Intel get? Initially, the most concrete thing is 3G. "This is a gap for Intel, which has focused on Bluetooth, Wi-Fi, and WiMax," Orr said. "As a result, when future architectures like an Atom platform are developed for MIDs (mobile Internet devices), Netbooks, smartphones, that means vendors will have more flexibility for connectivity."
In short, Intel can build 3G into its chipsets and Intel can compete more effectively in the future with products like the iPhone and Palm Pre that include 3G as standard. Intel-based notebooks and Netbooks, until recently, were rarely offered with 3G as a standard option.
"We're not talking about specific products today but certainly we would not have taken a license (from Nokia) if we didn't have the intention to build a product," Anand Chandrasekher, Intel senior vice president and general manager at the Ultra Mobility Group, said in a phone interview Tuesday, referring to Intel's licensing of Nokia's HSPA/3G modem technology.
And it may be too soon for 4G technologies like WiMax. There are many countries (ABI Research's Orr counts about 100) where 3G is just emerging, so talking about WiMax (a 4G technology) is "very premature for most countries," he said.
... Read moreUpdated at 8:20 a.m. PDT: Added Intel-Nokia announcement and Intel discussion.
Intel and Nokia announced on Tuesday a wide-ranging deal covering chips, hardware, and software for mobile devices.
The companies said their new "long-term relationship" will focus on developing new chip architectures and software and a new class of Intel-based mobile computing devices. The move is part of a major shift for Intel, which is a giant in PC chips but not a player in cell phones.
Among other aspects, the agreement covers mobile applications and wireless Internet access "in a user-friendly pocketable form factor."
The Intel and Nokia effort includes collaboration in several open-source mobile Linux software projects. Intel will also acquire a Nokia HSPA/3G modem IP license for use in future products.
"We will explore new ideas in designs, materials and displays that will go far beyond devices and services on the market today," Nokia said in a statement.
For Intel, the deal adds momentum to its push into the small device/smartphone space. The Nokia announcement follows a pact announced with LG Electronics in February to collaborate on development of smartphones based on Intel's future "Moorestown" silicon and Linux Moblin software.
In March, Intel also announced a deal with Taiwan Semiconductor Manufacturing Company (TSMC) to cooperate in the manufacture of Atom processors.
Intel's need
The point of all of these announcements is to get Intel-architecture chips into cell phones, a giant worldwide market with well over a billion devices sold in 2008.
And the world's largest chipmaker needs to be a player in this market. Smartphones like Apple's iPhone, the Palm Pre, and T-Mobile's Google Android phone, the G1, are taking on many of the attributes of PCs and are increasingly adept at Web browsing, video streaming, and game playing--not unlike a personal computer.
Toshiba just began selling a smartphone that packs a 1GHz Qualcomm processor.
Texas Instruments and other chipmakers are also readying speedy processors for smartphones next year with two processing cores and enhanced video capabilities. And it was disclosed last week that an Nvidia chip will power Microsoft's Zune HD.
And what do those devices and technologies have in common? They're all powered by chips based on the ARM design.
Why ARM? ARM's approach to designing processors is the opposite of Intel's: power efficiency is paramount, performance secondary. Smartphone chips need to operate within a tiny power envelope, typically well under 0.5 watts and must last all day on one battery charge. Current Intel Atom chips--while relatively fast--draw too much power and are hardly suitable for smartphones.
The irony
Ironically, Intel manufactured an ARM-based chip series for many years called Xscale, which traces its heritage to a design called StrongARM. These chips were used in the Hewlett-Packard iPaq, a leading handheld for a number of years. But Intel sold this business to Marvell in 2006.
The chipmaker's strategy now is to shrink its global-standard x86 PC chip architecture to the point where it can run efficiently in smartphones. That's where Moorestown comes in. Intel claims Moorestown will be suited for high-end smartphones by 2010 and that "Medfield" silicon will make it into standard cell phones by 2011.
Neither Intel nor LG gave a date for availability of the LG device, but it is expected to appear soon after Moorestown is available. Intel is saying that Moorestown will be available in 2009 or 2010, though the second half of 2009 appears increasingly likely.
Under the agreement with TSMC, Intel will port its Atom processor technology to TSMC, which will serve solely as a manufacturer of Atom-related silicon--primarily chipsets.
ARM, the company that designs chips for the world's smartphones, said handset makers will deliver the first models using more than one processor core next year, as high-end mobile phones begin to mimic the hardware attributes of PCs.
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Palm Pre
(Credit: Palm )And that means top smartphone suppliers such as Apple and Palm, which both use ARM-based processors, will likely deliver models packing at least two cores inside the main processor--referred to as an application (or applications) processor.
This is a natural progression for high-end smartphones like the iPhone and Palm Pre as the software those phones run gets increasingly sophisticated.
"You'll definitely see handsets shipping with a dual-core A9 in 2010," James Bruce, wireless segment manager for ARM, said in a phone interview earlier this week, referring to the next-generation Cortex-A9 processor from ARM.
The Palm Pre uses a processor based on the current-generation Cortex A8. The iPhone also uses an Apple-branded chip that is based on an ARM design.
"The A8 is just a single core while the A9 will be dual-core, all the way up to quad-core to give smartphones an even bigger performance boost," Bruce said.
He said the move to dual-core phones should happen relatively quickly. "It's very aggressive. It's only going to be in a year's time that you're going to get these phones," he said.
And what about power consumption, a critical concern for smartphones looking to deliver all-day battery life? "What we've done on the A9 is actually make it more power efficient than the A8. The dual-core A9 will be coming out on 45-nanometer rather than the (current) 65-nanometer process," Bruce said. Generally, the smaller the geometries, the faster and more power-efficient the processor is.
Bruce continued. "With the dual-core running at maximum load there's probably going to be an increase of about 10 to 20 percent in power consumption but in general day to day use you're actually going to see better battery life."
... Read moreIntel's Medfield is the chip that will drive the chipmaker's smartphone strategy in 2011 and beyond, according to an Intel executive speaking recently at an Intel investor meeting.
Slides (accessible on Intel's Web site) shown by Anand Chandrasekher, general manager of Intel's Ultra Mobility Group, at last week's Intel investor meeting map out the road Intel will take to the mainstream smartphone market. (The slides were highlighted on technology sites such as Engadget and UMPC Portal).
Intel is taking a graduated approach to the smartphone market: the ultimate target is the mainstream smartphone
(Credit: Intel)Intel's Medfield was first disclosed in December.
Chandrasekher showed a slide that put Medfield in the mainstream smartphone market by 2011 by reducing the size and power requirements of the chip. "We take the power down again using 32-nanometer (technology), we, of course, take the performance up using 32 nanometer. But we also consolidated everything onto one chip and shrink the form factor (smartphone design) down again," Chandrasekher said at the investor meeting, which was streamed over the Web.
"We got to get the power down so we can get all-day battery life and get the (chip) package (size) down," he said. "It's not going to be (that in) one generation we fix everything," he added.
Chandrasekher said Intel's biggest advantage in the mobile Internet device and smartphone market is the most obvious: Intel's x86 architecture that runs the world's PCs.
He also offered some updates for Moorestown, the chip that will precede Medfield. "Last year I said we're going to do better then 10X on platform idle power (reduction over the current Menlow technology) on Moorestown. Today, I'm telling you, for the first time outside the walls of Intel, we're going to do 50X better on idle power," he said. The idle power will be 20 milliwatts at the "platform level"--which refers to the idle power (or standby mode) of the actual device, such as a smartphone, not the just chip, according to Chandrasekher.
Chandrasekher also clarified that Taiwan Semiconductor Manufacturing Company will be making the "Langwell" half of the Moorestown silicon. "That second chip (Langwell) we manufacture on TSMC because there's a lot of that IP (intellectual property) sitting on TSMC today," he said.
For comparison, he showed a current Google Android-based phone that had idle power of 20 milliwatts.
Intel is making a bid to become a force in smartphones. This will test its ability to compete in arguably the most important chip market outside of PCs.
The deal struck this week with Taiwan Semiconductor Manufacturing Co. will put the Intel architecture into the same factories that churn out chips for companies like Qualcomm and Texas Instruments, which use an alternative architecture called ARM--the choice for many small devices, cell phones, and most smartphones, including the Apple iPhone, BlackBerry Storm, and Google-based Android phones.
ARM has always been a thorn in Intel's side. So much so that Intel acquired the StrongARM architecture in 1997, turned into Intel XScale, and aimed it at handhelds (most prominently iPaq handhelds sold by Compaq and then Hewlett-Packard). Before that, StrongARM had been used in the Apple Newton (a primitive precursor to the iPhone) and other small devices.
But Intel sold the money-losing XScale business to Marvell in 2006. And so ended Intel's attempt to compete ARM to ARM in the small device space.
Intel processors are not a player in the market for smartphones like T-Mobile's G1, which uses an ARM-based Qualcomm chip
(Credit: T-Mobile)What happened? The small consumer device and communications chip business is not the PC business and, consequently, not an area where Intel has historically been competitive. But that doesn't mean Intel can afford to ignore this space. Handheld personal computing has arrived (if you hadn't noticed). The iPhone, Blackberry, and Android phones are virtually handheld PCs--with Intel processors nowhere to be seen.
So this time instead of coming up with an ARM chip, Intel is trying to shoehorn its successful x86 architecture into the ARM universe of smart phones, consumer electronics, and the amorphous, though typically profitable, "embedded" market. TSMC excels in building chips for all of these markets. The world's largest contract chip manufacturer operates successfully on gross margins much lower than Intel's enviable x86 PC margins, typically north of 50 percent (as this CNET Blog Network piece points out).
And one market where Intel would like to succeed (and some would say must succeed) is smartphones because of its sheer size and because "that's where the PC functionality is moving toward," said Doug Freedman at Broadpoint AmTech. Though markets for hardware that goes into, for example, industrial or medical hardware, will be important, it's the smartphone market that will test Intel's ability to compete profitably in a consumer space outside of PCs.
Just how big is the overall cell phone market? On a unit basis, it is about five times the size of the PC market. There were about 1.22 billion handsets shipped in 2008, while the PC market is forecast at 257 million units in 2009, according to Gartner.
But Intel cannot operate the way it does in the PC world--where its credo almost seems to be: if we build it, they (HP, Dell, Acer) will come. This won't work in the cell phone industry. Service providers and handset makers are center stage, hardware is at best a side show. So, hooking up with TSMC is a way for Intel to make itself more palatable to cell phone companies, which are not used to dealing with the 800-pound PC chip gorilla. "By going through a TSMC, it is perceived less as an Intel move and more as, hey, I'm just another source for you the handset maker because you're already used to buying stuff from TSMC," said Ian Lao, an analyst at In-Stat. "It's insulating the gorilla thing."
And it's none too early. Qualcomm is now pushing the performance envelope with its Snapdragon platform, Nvidia is hawking its graphics-intensive Tegra technology, and Texas Instruments is revving up its OMAP chips to achieve better performance per watt.
In other words, while these chip companies are not wavering from their longstanding strong suit of power frugality--an imperative in the cell phone world--they are also beginning to ratchet up chip speeds to 1GHz and above and add more processing cores. And that's Intel's strong suit.
"For ARM developers, multi-core implementations will address much of the performance differential," said In-Stat's Lao. Look no further than Qualcomm. The future Qualcomm QSD8672 chip will be a dual-core Snapdragon that features two CPU computing cores capable of 1.5GHz performance, 1080p high-definition video, Wi-Fi, mobile TV, and GPS. The graphics core is based on Advanced Micro Devices' ATI unit's technology.
Hmm...Dual-core processor, ATI graphics, high-definition video? Sounds a lot like a PC. Indeed one of the burning questions is whether PC makers will begin running Microsoft's operating systems on ARM-based devices, according to Lao.
"The next 9 to 18 months will be quite interesting to watch," he said. "Can Intel get down to the cost and power levels needed? Will they be able to get the carrier and handset makers aboard? There will definitely be a market shakeup."
Updated at 9:35 p.m. PST with updated list of Atom Z5xx series processors.
A lot happened in the chip world Monday. Amid all the commotion, Intel announced a new line of Atom processors.
In addition to Intel's watershed deal with Taiwan Semiconductor Manufacturing Company to essentially co-manufacture Atom processors, Advanced Micro Devices officially split in two, and Spansion filed for bankruptcy protection.
But in case you missed it, Intel also rolled out new Atom Z5xx series processors. Four "unique" new versions in all, according to Intel. What's different about this Atom announcement is that Intel is saying clearly for the first time that a shipping Atom product is targeting phones--or what it is calling "media phones." To date, Intel has used nomenclature like "MID" (mobile Internet device) or "Internet devices" for other Atom models.
Intel Z5xx series of Atom processors with new models listed
(Credit: Intel)That said, don't expect to see these Atom processors in many smartphones. That won't happen until Intel brings out the next version of Atom called Moorestown, due late this year or next year. That chip will be lower power than current Atom processors, in order to meet smartphone battery-life requirements, and more highly integrated. Moorestown is the chip that LG Electronics plans to use in a future smartphone.
Intel is also targeting the chips at embedded industrial applications--potentially the largest market--and in-car infotainment devices.
Intel CEO Paul Otellini commented on competition with Nvidia, the economy, and the possible fate of its flash memory factories on Wednesday at a tech conference in San Francisco.
Otellini began by speaking to the fact that the global economic downturn has depleted inventories of chips. "I don't think there's much inventory out there. It's hard to imagine that there's a significant drop below this." He made his remarks at the Goldman Sachs Technology and Internet Conference 2009, which was streamed live.
Intel CEO Paul Otellini
(Credit: Intel )And moving quickly to the next generation of chip technology is critical to get Intel through the downturn. "One of the reasons you saw us be so bold as to make an announcement on 32-nanometer (manufacturing technology) two weeks ago is that we are quite confident in the benefit of the technology. It will lower our cost. We'll have a lower cost structure by moving our product line to the technology. That gives us comfort and will allow us to do well when the market recovers."
Otellini said that Nvidia is not in a strong competitive position. "If you don't have a microprocessor, what else do you have to sell?" he said, countering Nvidia's claims that the industry is becoming more centered on graphics chips. "The graphics subsystem for most machines will be subsumed into the microprocessor. So what Nvidia is doing is making an argument to defend the status quo," he said. He said if you want higher performance you can buy a discrete graphics chip. "You can buy it from them or you can buy it from us," he said, referring to Intel's upcoming Larrabee graphics chip.
And what about Intel's flash memory strategy? "It may not be essential for us to have our own NAND factories to build (flash memory). We could probably specify the product that we want and buy it from third parties," he said.
Speaking about Atom he said the "shortest time to money" is Atom in the embedded market place. As Intel moves to a system-on-chip (SOC) design it will become more profitable. "With north of a billion-dollar business there, that should triple in the next few years," he said. Embedded chips are used in cars, consumer electronics, and industrial applications, among other areas.
About Netbooks he said: "We lit a fuse. It's the only bright spot in the PC industry at this point in time." But he added: "Atom is still less than half the performance of our entry-level Celeron product. It wasn't designed to be a notebook replacement part." He added the Microsoft will limit the starter edition of Windows 7--that will be used for future Netbooks--to three applications running at once. "You'll be underwhelmed," he said, relative to mainstream notebooks
He also addressed smartphones and the future Moorestown Atom chip. "You saw some announcements last week with LG (Electronics). You'll see some announcements in the next month or so from some other major handset manufacturers. Watch that space." He also added that Intel, with its 32-nanometer technology, is trying to move from the MID (mobile Internet device) design to true smartphones. "System-on-chip allows us to get down to a single chip...so we can get the MID form factor--which is sort of an ultra-mobile PC-- into the mobile handset form factor. That's critical for us."
The Intel architecture is coming to smartphones.
LG Electronics and Intel are announcing a collaboration based on Intel's Moorestown silicon and the Linux Moblin v2.0 software platform at the Mobile World Congress in Barcelona on Monday. The future LG device--which is being described as a smartphone--is expected to be one of the first Moorestown designs to market.
Moorestown is the code name for the successor to Intel's current Atom processor.
"LG and Intel's common goal is to unleash rich Internet experiences across a range of mobile devices while delivering the functionality of today's high-end smartphones," the companies said in a statement.
The key to getting Intel chips that run all the most popular PC software into a phone is reducing the power consumption below the Atom chip used today in Netbooks, according to Ashok Kumar, an analyst at investment bank Collins Stewart. "If you look at the power consumption projectory, they dropped Atom to two watts and they expect to drop that (with Moorestown) by a factor of 10," Kumar said.
"That would squarely be in the power envelope of a smartphone," Kumar said. Intel mobile processors found in mainstream laptops have a thermal envelope of between 25 and 35 watts.
But whether Moorestown can actually achieve the energy frugality of silicon from longtime cell phone silicon suppliers like Qualcomm and Texas Instruments remains to be seen. Toshiba recently disclosed that its using Qualcomm's Snapdragon chip in a future phone and Qualcomm supplied the main processor in the first phone using Google's Android OS.
Moorestown will also be used in MIDs or mobile Internet devices. And it seems, at times, that the terms smartphone and MID are used almost interchangeably. "The MID segment will drive growth at LG Electronics. We chose Intel's next-generation Moorestown platform and Moblin-based OS to pursue this segment because of the high performance and Internet compatibility this brings to our service provider customers," Jung Jun Lee, executive vice president of LG Electronics, said in a statement.
Neither company gave a date for availability of the LG device, but it is expected to appear soon after Moorestown is available. Intel is saying that Moorestown will be available in 2009 or 2010, though the second half of 2009 appears increasingly likely.
Solid-state drives may see heady growth despite a sliding world economy, according to a report released Tuesday by a market research company. Devices like the Apple iPod and iPhone are expected to drive growth.
Micron Technology along with its partner Intel are challenging SSD market leaders Samsung and Toshiba, In-Stat said
(Credit: Micron)Flash memory revenue in the solid-state drive segment will see compound annual growth rates of over 100 percent through 2012, according to market research firm In-Stat. The type of flash used in solid-state drives is referred to as NAND flash.
"You're starting from quite a small base. Back in 2006, you're in the tens of millions (of dollars) kind of a number. By 2012, you're easily over five billion. So the growth rates do get rather high," said Ian Lao, a senior analyst at Scottsdale, Ariz.-based In-Stat. The market researcher forecasts compound annual growth at 106 percent from 2006 through 2012, Lao said.
In the consumer segment, Lao says he expects to see most of the growth in small devices like portable music players and smart phones. Music players such as the Apple iPod and Microsoft Zune will adopt solid-state drives instead of the tiny 1.8-inch hard disk drives they use now because of better durability and shock resistance. "They suffer the risk of, hey, I just dropped my Zune, it doesn't work anymore," Lao said. SSDs will provide much greater reliability, he said.
And as smart phones become more PC-like, they will graduate from relatively simple flash drives to more sophisticated SSDs with the same Serial ATA (SATA) interfaces used in PCs today, Lao said. An iPhone, for example, with a more computer-like operating system and features would use an SSD, Lao said.
Future ultra-portable laptops, represented today by the MacBook Air and HP Voodoo Envy 133, will also drive SSD growth, as will Netbooks.
Sharp growth will also be seen in the corporate enterprise market. SSDs will, in an increasing number of cases, replace very-high-speed hard disk drives in server environments, Lao said.
Flash drives (non-SSD) will remain widely used in various music players, mobile handsets, after-market cards, and USB flash drives, with a combined market share of more than 80 percent during the next couple of years, according to the report. However, this percentage will drop to about 70 percent by 2012, as SSDs grow in importance, the report said.
Worldwide NAND flash revenues are likely to grow at a compound annual growth rate of 29.7 percent from 2007 to 2012 to reach $61 billion, In-Stat said. Revenues for NOR flash--used, for example, to store program code in cell phones--will increase at a 6 percent compound annual growth rate from 2007 through 2012.
A clash is brewing as PC and cell phone chip suppliers vie for new designs that fall outside traditional product categories, an analyst said in a research note Wednesday.
Asus 10-inch Eee PC 1000
(Credit: Asus)Doug Freedman, a chip analyst at AmTech Research, said the "line between cell phones and PCs is clearly blurring" and that consequently "PC and cell phone food chains will battle for market share in these new classes of devices." He calls this the "big bang between PCs and handsets."
This will happen as more tweener products emerge. "New product categories such as Netbooks, MIDs (mobile Internet devices), and smartphones all lie in the spectrum between the traditional PC and handset product categories," he wrote. "Cell phones are increasing in screen sizes, computational power and capabilities, while PCs are seeing declines in screen sizes and increases in connectivity."
This may present problems for chip suppliers as they rush to build inventory for these newfangled devices, resulting in an oversupply for device categories that don't succeed. "It's a safe bet that we'll end up with losers," he said in an interview. Moreover, there will be lower-than-expected gross margins (a crucial indicator of profitability) for some of the chips that go into these products, according to Freedman.
While the Netbook is considered a successful tweener product, it exemplifies a category that may be facing a reality check as the novelty wears off, resulting in an oversupply problem, he said. Intel says it has seen strong demand for the Atom processor on the back of the popularity of Netbooks but there are signs that demand has started to ebb, according to Freedman. This has resulted in cancellations from device makers for chips that go into Netbooks, Freedman said.
Netbooks have been popular because of their novel design--what is essentially a very small, very-low-cost (below $500) laptop, a category that hasn't existed to date. Ultra-small laptops (such as the MacBook Air and Toshiba Portege) have traditionally commanded a very stiff premium, typically going for more than $1,500.
Contrary to what Intel has been saying, Freedman wrote in the research note that the "initial generation Netbook solutions may not succeed in emerging/low income markets as users find feature and performance sacrifice in Netbooks (i.e. 5- to 8-inch screens) unacceptable for a networked family."
He added that Intel will also continue to be challenged by cannibalization of Netbooks: that is, Netbooks will take market share from traditional notebooks.
Down the road, Freedman writes, "we do not expect the PC and handset to converge into a single 'holy grail' device." PC and cell phone makers will continue to build devices that try to bridge the gap. Apple's iPhone is an example of a device at one end of the spectrum, while the 10-inch Asus Eee PC Netbook addresses the other end.
"We expect most users to continue to require two devices: one large form factor device and one small form factor device," he said in the note.
