Intel Corp. (Nasdaq: INTC), the 800-pound gorilla of the semiconductor market, has finally entered the wireless court. After years of trying, the company said its processors will be designed into smartphones and tablet PCs at three of the world's leading OEMs.
At the annual Consumer Electronics Show, Intel announced critical design deals with China Unicom Ltd. (NYSE: CHU), Lenovo Group Ltd. (Hong Kong: 992), and Motorola Mobility Inc. (NYSE: MMI) -- its first successful challenge of ARM Ltd. (Nasdaq: ARMHY; London: ARM) in the market. Lenovo, Motorola, and China Unicom will roll out devices based on Intel architecture this year. The world's leading semiconductor company will be getting the validation it has long sought as a player in the wireless industry.
"When great silicon and software technology meets great mobile and design innovation, amazing things can happen," Paul Otellini, Intel's president and CEO, said in a press release. "Our long-term relationship with Motorola Mobility will help accelerate Intel architecture into new mobile market segments."
The significance of these design wins for Intel cannot be overemphasized. For years, the company has struggled to break into the sector. It initially fought vainly against the dominance of ARM architecture. Even Intel's PC OEM customers worried that another near-monopoly would result if it gained a large following in the wireless equipment market. There was even speculation that its processors, most of which were designed for the personal computer market, were power hogs and would not be so optimal for the cellular industry.
Efforts to prove the doubters wrong led the company to pour billions into acquisitions and product development initiatives. Many of the acquisitions -- some early in the last decade -- failed to produce the desired results, and Intel could not make a dent in the sector. More recently, it began deploying its enormous internal engineering resources and the huge cash hoard built up in the PC microprocessor business. Intel has since developed chipsets and reference designs for the wireless market.
These efforts produced the Atom processor, which China Unicom, Lenovo, and Motorola will use. The agreements gave Intel the bragging rights it has long desired and signaled clearly that it won't walk away from the sector, despite the past failures. Few companies would like to have Intel as a rival, as Advanced Micro Devices Inc. (AMD) (NYSE: AMD) can attest.
Meanwhile, in England, a nightmarish journey is beginning for ARM, the IP company that rapidly built up a commanding customer base in the wireless sector on the strength of patronage by customers seeking to ward off another monopoly. ARM has maintained its leading position in this market, but Intel's latest design wins will most certainly break the dam wall. If other OEMs and telecoms embrace the Intel architecture (a lot of incentives from the company would help, especially in a price-challenged market), ARM's marketshare could slip dramatically over the next few years.
Of course, Intel could face another failure if its chips fail to catch fire. In that case, the company would be forced to try again. As Otellini said in a CES presentation, the world is transitioning from a focus on personal computers to a focus on personal computing. Intel cannot afford to be excluded from this wirelessly charged world. Somehow, it has to build on this toehold it has finally secured.
Jacob, this is so true. ARM has developed a widespread ecosystem with numerous opensource projects, resources, know-hows that developers can easily gain access to.
Tirlapur, It's a big market. There's no way either ARM or Qualcomm could prevent Intel from gaining market share. What they can do is find ways to be more competitive themselves.
ARM and Qualcomm, as smaller, specilaty companies, will be able to respond quickly and stay a step ahead.
@Barbara, how do you think ARM and Qualcomm will respond to this threat from Intel ? What options do they have to make sure that Intel doesn't succeed ?
Tirlapur, as of now most of the manufactures are comfortable with ARM. So if Intel needs an immediate switch over or a mass pull, of course they have to come up with chips having impressive feature. Otherwise also switching may happen, but in a slower mode.
Unless and until Intel comes up with chips, which can overcome some of the existing drawbacks and improved efficiency, it may take time to get succeed in market.
@Jacob, you are right but lets not forget intel has the advantage of 3d transistors or Finfets.. Moreover Intel has mentioned that they have 'line of sight to 14nm'. This will give Intel huge advantage over ARM.
Barbara, new and late comers has to struggle well, in order to have their own portions in the market. In that angle Intel may take time to capture their market share. Most of the manufactures are using Qualcomm and ARM chips for their devices and moreover they are comfortable with it. Unless and until Intel comes up with chips, which can overcome some of the existing drawbacks and improved efficiency, it may take time to get succeed in market.
Jay_Bond, Intel may be get success with the new mobile chip, but the competition may be tougher. As of now most of the manufactures are comfortable with ARM and its architecture, only concerned about power consumption. Intel is claiming that for their new chip set, power consumption is very less and it may get click in industry for a better mileage.
I can only hope that Intel play ethical after row of lawsuits and penatlies. A desperate company would take desperate measures. Intel has all the muscles and cash to lure most of the companies. If Intel design wins make even a hairline crack in ARM dam then we will see Intel going for the kill.
"...but most 'consumers' don't really have any idea who Intel is as a brand (more techie than anything) except for the commercials"
Pocharle how effective would that be on Intel in processor manufacturing? It's apparent most mobile device consumers have little or no knowledge about components made up of the devices. As EBN readers and Blogger suggested, i believe Intel can walk into any technology field of business unperturbed about competition. And Intel into smartphones & tablets, surely pressure and panic on others.
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
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Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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