InvestorsHub Logo
Boards
News
Market Data
Markets
Discover
Discover
Subscribe Login/Register
S&P 500
5,018.39
(
-0.34%
)
US TECH 100
16,952.00
(
-0.19%
)
Dow Jones
37,903.29
(
0.23%
)
Brent Oil
83.73
(
0.23%
)
Bitcoin
57,154.99
(
-1.86%
)
Post# of 617042
Next 10
Reply Private New
Public Reply Private Reply New Post
Keep Last Read
Replies (3) Keep Next 10 Report Keyboard Shortcuts
Replies (3) Next 10 Prev Next

midastouch017

Send PM Follow Ignore
Followers 145
Posts 27560
Boards Moderated 3
Alias Born 02/07/2004

midastouch017

Re: mick post# 69752

Sunday, 10/16/2005 7:55:03 AM

Sunday, October 16, 2005 7:55:03 AM

Post# of 617042
Re INTC,

What $1.6 billion got Intel
16.10.2005 | 11:18
Oded Hermoni

Six years ago this week, Davidi Gilo closed the deal of a lifetime. He sold his Israeli processors company, DSPC, to Intel (Nasdaq:INTC) for $1.6 billion cash.

Intel saw DSPC as its future hub for palm-computer and mobile phone chips.

Six years later, Intel's Haifa center has produced the Centrino platform for mobile computers, yet nary a peep has come from Petah Tikva, which is the Intel center that has the hundreds of DSPC people.

The combined Manitoba processor, which includes an applications processor, a GSM-GPRS modem and a flash memory on a single chip, is based on a DSPC development. It is also Intel's first foray into chips for cellular. Yet despite the tremendous Intel clout behind it, the Manitoba did not take off well.

Several cellular phone makers promised to use it, but insofar as could be ascertained, only the British company O2 based its technology on it, years after Intel first released the line.

Gambling on the Hermon

But Intel's real gamble on the growing cellular market is on a new chipset, called the Hermon. It was the first Intel produced after buying DSPC, and targeted 2.5 and 3-generation cellular.

Hermon's birth was slow, and its success is also in infancy. In fact it was only a month ago, six years after buying DSPC for that tremendous sum, that Intel could release its first sigh of relief: RIM, the Canadian company that makes Blackberry devices, announced its next line of phones – for release in 2006 – would be based on Hermon chipsets developed in Israel.

Intel had been awaiting an announcement like that for a long time, but chose to downplay the news, for fear of arousing excessive expectations. Intel Israel didn't even announce the deal, which was the first big one for the product from Petah Tikva.

The man behind the scenes

Erez Schwartz, a modest young engineer, is the man behind the Manitoba, the Hermon, and the latest family of chipsets being developed hush-hush at Petah Tikva: the Tavor.

Schwartz hailed from DSPC, and has evolved from engineer to man with two hats at Intel: he manages the Petah Tikva campus, which includes Envara – the startup Intel bought last year to develop WiMax. And he the man in charge at the international Intel corporation for the development of chips for hand-held computers and cellular devices.

In his first interview, with TheMarker, Schwartz shares his vision of future cellphones and talks about RIM's purchase of the Hermon. Finally DSPC may pay off for Intel.

"We elected to keep a low profile and focus on technology More doing, less talking," Schwartz says: it is better to talk about finished products, such as the one Blackberry is buying, instead of talking about gauzy plans for the future.

"From our perspective the statement about Blackberry was a milestone. It will become the first device based on the Hermon to hit the market. A company like RIM, which had an enormous range of choices, chose it for integration in the Blackberry, which is an advanced device," Schwartz goes on, a man apparently more comfortable with low profile than bombast.

TheMarker: Smaller companies like Modem ART (sold last year to Agere for $150 million) managed to develop baseband processors for third-generation cellular technology. You also focus on third-generation processors. Why is it taking you so long?

Schwartz: "I don't want to discuss Modem ART and am not sure that all the statements by the other companies are fully reliable. You have to understand that in recent years our focus in development has been on third-generation. In parallel we sold products that had been at DSPC, and there will be declarations made here too.

"Developing third-generation technology takes a very long time. Nokia has been working on 3G technology since the 1990s and we only got in later. It takes a long time from chip ready to roll, to integration into devices.

"It is very different from the computer world in which Intel operates, where there is a short hiatus from chip development to integration in new computers."

The Hermon is Intel's central offering for tiny computers and cellphones. It is based on a single chip that has a processor operating at 312 megahertz, and a modem for GPRS, EDGE and 3G generations.

The Hermon can serve as a processor separate from the main one, in an upper-end device, or as a combined communications and data processor in a single chip, which is the case in Blackberry and phone devices. It can handle a range of data and signals such as video, MP3 music and a combination of wireless standards such as Bluetooth, GPS and WiFi, without guzzling battery power.

Small chip, cheap devices

One of the advantages at the top of the Hermon family scale is the ability to transit from 2.5 to 3 generation according to the deployment of the communications supplier in the field, without the user so much as noticing. But the chipset's greatest advantage, says Schwartz, lies in its integrative abilities. The tiny chip enables smaller and cheaper devices to be built for 3G communications.

The Hermon is the first chipset that can bring 3G devices to the masses, Schwartz says, adding that the phone companies presently subsidize the purchase of the costly 3G phones, but aren't likely to persist in that policy over time.

Childhood diseases

True, the range of 3G phones has been growing, Schwartz says: but the market is very young and the devices out there are plagued with childhood glitches, such as lost calls, technological mismatches, and spotty network coverage.

From Intel's perspective the 3G market looks tasty and should advance to the stats of the GSM market, for which the company has a large range of products for various market segments, Schwartz projects.

Intel's competitors in this realm are companies that sprouted from the cellphone makers, such as Sony-Ericsson, Qualcomm, and Freescale, which developed chips for Motorola before turning independent. The biggest rival however is Nokia, which is the only one making all its solutions for its phones in-house.

The challenges are vast. "Third-generation and all the wireless standards around it – GSP, bluetooth, WiMax, Wi-Fi, TV reception, identification means and remote payment through RFID, and more and more, make the development of 3G technology highly challenging from the engineering perspective," Schwartz explains.

"There are roughly ten different communications standards in a single tiny processor that have to get along without bothering one another, even when their frequencies have the potential to clash," he describes. "Since even we cannot precisely predict how the devices will look in 2009, we create an integrative infrastructure that will allow the addition of new elements, instead of incorporating them in the same system on a single chip. In the future they'll be integrated too," he adds.

Already by next year, 2006, Schwartz says, people should be able to buy devices with cellular and WiFi capacities, enabling them to shirt immediately from the cellular network to the Internet one, and make cheap calls in wireless hot spots. Problems to solve still abound, such as billing and regulation, he admits: but clearly phone companies face a new era, and Schwartz and his team are building the Hermon to support the applications.

TV too

Another change the future phones will integrate is the ability to receive TV signals. Later small devices should also have advanced GPS capacity.

Procurement is key to Intel's process. At this stage, Schwartz says, Intel's policy is not to plan and develop all the components by itself, but to see where the market is going and combine elements hailing from other companies.

What does he believe? That the industry is going toward palm-held computers that are not cell phones as such, but that can receive wireless and cellular signals; and smart phones that are upgraded with processing and calculating capacity.

What about the next generation of processors, the Tavors? The project remains tightly under wraps and Schwartz is not talking. He will say only that the next stage is a 3 and 3.5G technology, with higher integrative and application capacity on a single chip. He is not saying it, but this next generation will probably combine WiMax competing with cellular in urban environments, over the transmission of large amounts of data.

http://tinyurl.com/awv3z

Dubi


Public Reply Private Reply New Post
Keep Last Read
Replies (3) Keep Last Read Next 10 Report Keyboard Shortcuts
Replies (3) Next 10 Prev Next

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.

Sign Up