interesting article laying out need for baseband expertise (think:IDCC)
QCOM, NVDA: UBS Lays Out Landscape Of Tablet, Phone Wars
Posted by Tiernan Ray
UBS Securities’s chip analyst Uche Orji just hosted a pretty interesting conference call regarding the battle for mobile chips, starting at 11 am, Eastern. The call featured a presentation by Linley Gwennap, the founder of consulting firm The Linley Group, and also a contributor to Microprocessor Report, which is one of the best chip newsletters around, in my opinion.
Gwennap concludes that Qualcomm (QCOM) has a strong position, based on the fact that it has baseband radio chip capabilities, which will be important for any smartphones, and based on the company having invested in dramatically improving its graphics performance capabilities.
Nvidia (NVDA), on the other hand, is at risk of losing an early lead in tablet chips, while having a weak position in phones. The company has no baseband expertise, and will have to develop such to move from what is essentially “zero” market share in phone processors in 2010.
Nvidia has chips in some brand-new phones, such as Motorola Mobility‘s (MMI) “Atrix” phone, but overall it has won very few deals. Further out, Nvidia, argues Gwennap, will have to have expertise in baseband radios, as Qualcomm does.
Gwennap predicted lots of mergers and acquisitions in coming years as chip makers without baseband radios combine with makers of basebands.
As for tablets, Nvidia’s had a lead over other vendors with dual-core processors, but with other vendors planning to rapidly roll out quad-core parts in the coming year, such as Qualcomm’s “Krait”-based processors, and Texas Instrument’s (TXN) “OMAP5,” Gwennap predicts that Nvidia’s “Kal-El” quad-core chip may not enjoy the same lead in the next round of tablets.
As you can see from the image pasted below from Gwennap’s slide deck, he sees both TI and Qualcomm rapidly catching up with Kal-El.
Gwennap spent no time on Intel (INTC) in his formal presentation. When asked about Intel’s forthcoming “Medfield” processor, Gwennap emphasized the challenges facing the company. ARM Holdings (ARMH), the company that licenses CPU designs to Nvidia, Qualcomm, TI and others, has vastly improved performance while maintaining power savings in chip designs. That has put the onus on Intel to improve price and performance per watt after years of setting the status quo in PCs.
“Now the shoe is on the other foot: if Intel is going to go into the smartphone market, what is it going to take to convince a manufacturer to go over to Intel? Is it going to take performance that’s 50% better? 100% better? That’s a pretty high bar.”
As for TI, and Broadcom, both are seen as being at a disadvantage. TI is set to lose business at Nokia (NOK) as the latter transitions to using Microsoft’s (MSFT) software. And TI got out of baseband radios even though it looks like that capability will be increasingly important in smartphones. Broadcom has effectively “ignored smarphones and tablets,” as far as Gwennap is concerned.
Marvell Technology Group’s (MRVL) announced “some impressive products,” said Gwennap. However, “I’m starting to get worried that I’ve just not seen the design wins coming out of the other end of the pipeline,” said Gwennap. “For whatever reason, they’re not able to get traction.”
Gwennap was also asked about Taiwan’s Mediatek, which primarily serves the lower end of the cell phone and smartphone market. Gwennap observed that this is not a bad place to be, as the low end is currently where much of the unit volume growth is, worldwide
