CES 2012: Mainly Evolutionary

Generally, I would say most of the announcements at this year's Consumer Electronics Show (CES) improved on technologies already available. I didn't see anything totally revolutionary. There were two announcements at keynote speeches that I found quite intriguing.

During the opening keynote speech on Jan. 10, Dr. Paul Jacobs of Qualcomm Inc. (Nasdaq: QCOM) invited Liu Jun, president of the mobile internet and digital home group at Lenovo Group Ltd. (Hong Kong: 992), on stage for an announcement. Jun demonstrated his company's SmartTV, which is powered by Qualcomm's Snapdragon system-on-a-chip. The TV is available only in China, but I found it interesting that Lenovo is expanding its product line into the consumer's living room. This TV is also a feather in Qualcomm's cap, since it expands the company's market penetration of that product line.

Several hours later, Paul Otellini, CEO of Intel Corp. (Nasdaq: INTC), also brought up Jun, who announced that Lenovo would be producing a smartphone powered by Intel's Atom CPU. This is yet another market in which Lenovo is expanding. And what a great win for Intel. It has been targeting the Atom toward smartphones, and now it has deals not only with Motorola, an established player in the cellphone market, but also with a partner with a built-in connection to the Chinese market.

After listening to both presentations, I was struck by the thought that Lenovo has been quite clever in its interactions with semiconductor companies. It chose the underdog for both deals. Intel, which had not penetrated the smartphone market, is going to supply one of the world's largest OEMs with a smartphone processor. Likewise, Qualcomm is not the leader in TV processors, but this design could open the door for it to expand into the broader consumer market.

In the back of my mind, I thought about how clever it was for Lenovo to avoid selecting the top vendors for each application. Semico believes this is good for the market. It will most likely increase a healthy competition for these sockets. Were the decisions risky? I don't believe so. Both companies are highly successful in the markets they serve. These design wins give both Intel and Qualcomm a beachhead for expansion in terms of both applications and geography.

Future design deals will clearly involve increased competition from semiconductor suppliers. Semico Research Corp. congratulates Lenovo for its new products and for fostering continued innovation in the semiconductor industry.