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Archive for the ‘Atom’ Category

Intel Infineon: history repeats itself

Monday, August 30th, 2010

Unlike its perplexing McAfee move, Intel had to acquire Infineon. Intel must make the Atom succeed. The smartphone market is growing fast, and the media tablet market is in the starting blocks. Chips in these devices are increasingly systems-on-chip, combining multiple functions. To sell application processors in phones, you must have a baseband story. Infineon’s RF expertise is a further benefit.

As Linley Gwennap said when he predicted the acquisition a month ago, the fit is natural. Intel needs 3G and LTE basebands, Infineon has no application processor.

Linley also pointed out Intel’s abysmal track record for acquisitions.

Intel has been through this movie before, for the same strategic reasons. It acquired DSP Communications in 1999 for $1.6 Bn. The idea there was to enter the cellphone chip market with DSP’s baseband plus the XScale ARM processor that Intel got from DEC. It was great in theory, and XScale got solid design wins in the early smart-phones, but Intel neglected XScale, letting its performance lead over other ARM implementations dwindle, and its only significant baseband customer was RIM.

In 2005, Paul Otellini became CEO; at that time AMD was beginning to make worrying inroads into Intel’s market share. Otellini regrouped – he focused in on Intel’s core business, which he saw as being “Intel Architecture” chips. But XScale runs an instruction set architecture that competes with IA, namely ARM. So rather than continuing to invest in its competition, Intel instead dumped off its flagging cellphone chip business (baseband and XScale) to Marvell for $0.6 Bn, and set out to create an IA chip that could compete with ARM in size, power consumption and price. Hence Atom.

But does instruction set architecture matter that much any more? Intel’s pitch on Atom-based netbooks was that you could have “the whole Internet” on them, including the parts that run only on IA chips. But now there are no such parts. Everything relevant on the Internet works fine on ARM-based systems like Android phones. iPhones are doing great even without Adobe Flash.

So from Intel’s point of view, this decade-later redo of its entry into the cellphone chip business is different. It is doing it right, with a coherent corporate strategy. But from the point of view of the customers (the phone OEMs and carriers) it may not look so different. They will judge Intel’s offerings on price, performance, power efficiency, wireless quality and how easy Intel makes it to design-in the new chips. The same criteria as last time.

Rethink Wireless has some interesting insights on this topic…

Intel returns to the smartphone business in late 2009

Monday, June 2nd, 2008

The Intel Atom is aimed at Internet tablets, Mobile Internet Devices and Ultra-mobile PCs (or whatever the nom de jour is), but not at phones. I don’t think Intel has formally announced its return to the phone processor business yet, but Paul Otellini has been talking about it for a while now, so it seems overdue to make it official. That’s what the Financial Times did today with the headline “Intel to re-enter mobile market.” Otellini said the same thing to the New York Times on Sunday as well. Of course it has been expected ever since the first Atom announcement, and it may not really qualify as news, but here it is: “A second generation version of the chip, expected in late 2009, will be aimed at smart phones.”

As you know, the Atom is Intel’s prospective ARM-killer, but Intel will have some very heavy sledding to do to achieve this goal. The first obstacle is size and complexity. The Intel Architecture instruction set is much more complicated than the ARM, with decades of legacy dross gunking it up. The core proposition of IA for handsets is that IA is compatible with all the PC software and websites out there, so none of the legacy stuff can be left out. Intel has two factors working in its favor for this issue: first, a lot of the little-used functionality of IA can be implemented in microcode, which takes minimal die space. Second, Intel leads the world in process technology, and as it moves to the 32 nm and below nodes, vast numbers of transistors can be fitted into tiny chips. This shrinkage, and advances in power management technology, may enable the next generation of Atom to get into the same ballpark as ARM for battery life.

The second obstacle is incumbency. There are vastly more ARM processors out running in the world than there are Intel Architecture processors. The ARM is the processor used by effectively all phones and smart phones, and there are even more ARMs in other embedded applications. While Intel can point to a huge independent software developer community for IA, with a rich array of third party developer support, so can ARM for its architecture. And it’s not clear that the Atom will have a significant performance advantage over the ARM. ARM is not standing still on its architecture, delivering faster, lower power chips in step with Moore’s law just like Intel.

The incumbency issue also has a political aspect. Handset manufacturers are disinclined to hand Intel the kind of architectural franchise that it has in the PC world, so the Atom will have to have a compelling, essential advantage over the ARM in order to displace it in any but niche applications. Intel hopes that “the real Internet” is that advantage, but the iPhone has demonstrated that the real Internet can run very nicely on an ARM-based phone. In any case, within three years more smart phones will be shipping than PCs, and the other handset manufacturers will probably have caught up with Apple on the browser front, so it is possible that more Internet browsing will be being done with ARMs than IA chips.

The third obstacle is business model. To satisfy the stock market, Intel requires aggregate gross margins around 60%. This will be very tough to achieve in the mass-market for handset processors, because the margins on competing ARMs are much lower.

Good background on the Atom can be found in this EETimes article, this Beyond3d article, and this one by my colleague Linley Gwenapp.