After years of getting its guns and ammunition together, Intel Corp. (Nasdaq: INTC) is about to start shooting in the mobile handset market. Within weeks, the first set of smartphones sporting Intel processors will roll out, setting the stage for an explosive tussle for marketshare with devices using IP from ARM Ltd. (Nasdaq: ARMHY; London: ARM).
Intel has spent years preparing for this moment. Many in the component procurement business will be poring over its second-quarter results to see how well the products perform and whether the company can crack the hot but intensely competitive sector. ARM-licensed devices have dominated the segment, but with demand soaring in the mobile equipment space as the PC end is peaking, it is understandable why Intel is betting so much of its future on a successful debut.
Don't bet your entire retirement fund on Intel yet. The company has been trying for at least a decade to establish a beachhead in the communications market without much success. Recent acquisitions, including a business bought from Infineon Technologies AG (NYSE/Frankfurt: IFX), have positioned Intel for better performance this time around. Nevertheless, many electronics companies are hesitant to embrace Intel. They don't want to give it a monopoly similar to the one it has in the PC microprocessor sector.
However, this concern isn't grounded in reality. ARM isn't going to be dislodged easily (if at all) by Intel or any other competitor. Too many equipment makers have multiple generations of ARM-based products in the market already, and the design community focused on IP offered by the British company is huge and growing. Intel's offerings are untested in the sector. That fact, combined with industry wariness about fostering another monopoly, will make it unlikely for ARM to be edged out of the market.
Yet Intel remains one of the more formidable and fearsome players in the semiconductor market. Not only has it developed the IP for mobile processors, but it also can supply the hardware -- a combination that will give it tremendous appeal with purchasers. Potential customers can be assured they can negotiate supply with a single provider, rather than shopping for the IP at one provider and then engaging with foundries for production.
That's part of what makes Intel a forceful player in this market. During a conference call yesterday on the company's latest results, Paul Otellini, Intel's president and CEO, described the link between its manufacturing prowess and its ability to shape the market's future:
Our commitment to long-term research and development is paying off. We are beginning a year of major product and technology transitions that will have a very positive impact on our company and the industry. I'd like to highlight a few examples. We are ramping our 22-nanometer manufacturing process into high volume. This revolutionary technology uses our third-generation, high-k metal gate and the industry's first 3D Tri-Gate Transistors.
The move to Tri-Gate Transistors delivers roughly twice the improvement in transistor performance over conventional planar scaling when applied to low-power applications like smartphones and Ultrabooks. We combine our process technology, manufacturing and design to produce a highly leveraged business model that is becoming increasingly rare in our industry. That model allows us to do things others can't, like advancing our Atom roadmap at twice the rate of Moore's Law through 2014.
We're doing this at a time when the rest of the industry is struggling to ramp older technologies that lag our prior-generation, 32-nanometer process. Our research on 3D transistors began over 10 years ago, and advancements like this don't come easily. In fact, they're getting harder and harder to achieve, and our lead over the rest of the industry continues to grow, giving us product advantages in power, performance and cost.
Very few companies in the semiconductor market can offer such a compelling argument. In a separate blog, I will write more about the slate of products Intel is developing for handset, PC, and server OEMs. They can help us understand how this company has defended its position in the semiconductor market for so long and why ARM will eventually lose some of its marketshare in the wireless handset sector but will retain its leading position for a while.
The smartphone market seems to be maturing. Intel is entering at a time when implementing existing functionality at a competitive price is preferable to introducing new features.
Intel has very good quest for mobile market and has worked hard to reach there. It will be interesting to see how their powerful marketing force will try to turn the table from ARM. What unique thing will they offer to OE and customer? Will it be low power, hgiher performance, lower cost, new technology or all of them?
But Intel should not loose their focus from their main market. ARM is also trying for that market.
I agree with you Nemos. The word "embedded" has fragmented high -tech market to pieces, thereby allowing openessnes where each of Intel & ARM can gather as many. Embedded market opportunities set to get broader, though smartphone is a high end sector with huge demand of processors required.
The announcement by Intel it sounds very promising and of course the way into the mobile market will be like a walk for Intel. It is enough space for both companies (Intel ,ARM) to coexist also.
As well as ARM is doing, I'd hate for Intel to be breathing down my neck in my marekt. After prepping for a decade, I'm sure Intel's products targeted at smartphones will be excellent. Maybe not the best, but pretty darn good. ARM is extending its market by adding distributors which will help more design-wins. But as Bolaji says, don't bet against Intel.
Yes competition will surely heat up. ARM and Intel are doing fine in different markets until Intel have decided to join in the mobile sector. Though, ARM processors are still being used in low end embedded productions, and i dont really think ARM would get perturbed.
@Flyingscot, you are correct. I think a major player like Intel entering the business will do everybody good. This should speed up innovation and reduce costs due to competition between AMD and Intel. Eventualy, one company could get pushed aside, but I think that will be a bit down the road and after some major steps forward.
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.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
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.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
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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