FORWARD CONCEPTS

WIRELESS/DSP NEWSLETTER

April 16, 2014


Freescale Moving from PowerPC to ARM?

By all appearances, Freescale is moving beyond (if not away from) the PowerPC business in a big way and jumping on to ARM-based solutions. Last week, the company introduced new ARM-based products, in one case adding 8-core ARM 64-bit 2GHz Cortex-A57s for its new QorIQ LS2 network processor family. That builds on to the existing PowerPC-based QorIQ T family of multicore network processors.

In the second case, Freescale also announced last week that it was acquiring the ARM-based Comcerto® CPE communications processor business of Mindspeed Technologies, Inc, which includes a series of multicore, ARM-based embedded processors and associated software, an experienced team, and tier one global customers. The acquisition is from M/A Com, which earlier acquired Mindspeed Inc. and sold off Mindspeed's small-cell base station product line to Intel.

It's generally accepted that Freescale and Intel share the top-two market spots for communication processor chips. The Mindspeed acquisition certainly strengthens Freescale's position.

Intel Wireless Transparency Improves

Realizing that wireless really is to be a big part of its future, Intel is changing its financial reporting structure to break out quarterly earnings reports based on five major organizational groups:

  • PC Client Group (PCCG): Traditional PC chip business, but also including gateway and set top box business.

  • Data Center Group (CDG): Now including communications infrastructure (& Cloud RAN?).

  • Internet of Things Group (IOTG): Includes embedded intelligent systems, including Wind River Software group.

  • Mobile & Communications Group (MCG): Includes Phone Group, Tablet Group and Multi-Comm.

  • Software & services operating segments: Aggregated software and services operating segments.

These changes are reflected in the April 15th earnings report and will make following Intel's wireless progress easier for industry and market analysts. Without going into great detail, for the 12 months ending December 28, 2013, the results are listed in the table below:

INTEL CORPORATION

Supplemental Operating Segment Results

2013

'12-'13

2013

'12-'13

Operating Segment

Revenue (Mil)

YoY Change

Income (Mil)

YoY Change

PC Client Group

$33,270

-4.1%

$11,751

-9.7%

Data Center Group

$12,161

8.4%

$5,569

6.5%

Internet of Things Group

$1,801

12.6%

$550

97.8%

Mobile & Communications Group

$1,375

-23.2%

-$3,148

-77.3%

Software & services operating segments

$2,190

5.7%

$24

100.0%

All other

$1,911

-3.0%

-$2,455

16.1%

Totals

$52,708

-1.2%

$12,291

-16.0%

Clearly, the Mobile & Communications Group (which includes cellular chips, Wi-Fi, Bluetooth, GPS, etc.) is bleeding, with an income loss of $3.15 Billion last year after posting a loss of $1.78 billion in 2012. There are two ways to look at the loss: 1) It indicates poor allocation of resources, or 2) It shows an increased investment by Intel to eventually succeed in wireless. I actually choose the latter view because of the moves (some of which are described below) that indicate that Intel is placing increasing emphasis on wireless. With declines in PC shipments likely to continue, Intel has to change from the PC "mindset" and data centers and wireless have to be a major part of its future focus.

Intel Continues Investing Heavily in Wireless

Intel has announced its Smart Device Innovation Center in Shenzhen and US$100 million Intel Capital China Smart Device Innovation Fund to accelerate smart device innovation for tablets, smartphones, wearables, 2 in 1s and Internet of Things (IoT)…based on Intel chips, of course.

Intel Acquires NFC Technology

Intel has announced that it is acquiring a perpetual license for a royalty-free, paid-up license of INSIDE Secure's next generation MicroRead-v5 NFC modem technology. Under the terms of the contemplated agreement, INSIDE will transfer to Intel certain related tangible and intangible assets, including some IP assets. INSIDE Secure will receive US$19.2 million cash at closing and Intel will offer employment to certain INSIDE employees based in France and California.

INSIDE Secure will now focus on high added value embedded security solutions for mobile and connected devices and address the NFC market through licensing programs. INSIDE will continue supporting its legacy microcontroller NFC business and existing customers and will pursue development of other hardware platforms for mobile devices, including its PicoPulse™ NFC booster front end.

Friendly Colleague Plug

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Shameless Plug:

Our annual detailed report of cellular handsets, tablets and the chips that enable them is in "Comprehensive Cellphone & Tablet Chip Markets'14." At 478 pages, the report is the most extensive available...anywhere. The report provides a detailed market analysis of all significant cellular handset & tablet ICs from modems, application processors and RF transceivers to power amplifiers, followed by the most extensive analysis of "peripheral" chips (like Bluetooth, Wi-Fi, NFC, Touch Controllers, Image Sensors, GPS, FM/AM, HDMI, MEMS, etc.). This study explores the dynamics of all these devices and profiles the chip providers and market shares for each of them. Check the website to get an idea of the full extent of this valuable study and all of the components and companies covered: Details are here.

As always, I encourage your feedback.

Will Strauss

President & Principal Analyst

Forward Concepts