Does Wall Street Like Intel’s Mobile Plan?

In recent months Intel’s new CEO Brian Krzanich and President Renee James made several interesting statements, signalling to Wall Street that the chipmaker gets it – it has to do more in mobile.

With smartphone shipments expected to hit one billion per year as early as next year, Intel’s newfound love of mobile chips is hardly surprising. In recent months Intel told the world that it’s now treating Atom just like Core, which means Atom will no longer look like an unwanted stepchild. On the face of it this is good news for shareholders and investors, but scratch the surface it doesn’t look too encouraging.

As a result, most analysts expect Intel to post lacklustre results on Tuesday, which is hardly surprising given the state of the PC market, which is still the bulk of Intel’s core business. Analysts expect revenue of $13.47 billion, 0.1 percent higher year-on-year, but earnings per share are estimated at $0.53, or 8.6 percent down over last year. But negative EPS forecasts aren’t the biggest problem facing Intel. Most analysts agree that 2014 won’t be much better, but there are some factors that indicate even these bleak forecasts might be too optimistic.

The first Bay Trail products are starting to appear and initial performance reports are encouraging, but they are just that – encouraging rather than groundbreaking. Benchmarks seem to indicate that Bay Trail-T tablets end up marginally slower than Qualcomm 800 and Tegra 4 based devices, which are a bit older, too. With prices ranging from $32 to $37, the first batch of Bay Trail chips also cost a bit more than their ARM competitors, but a direct comparison is not possible as ARM players don’t disclose the unit prices of their chips.

Furthermore Intel still lacks integrated LTE support, which means Bay Trail isn’t going to score big phone design wins. Intel hopes to roll out its first LTE enabled products next year, but there’s still some ambiguity. For example, Intel discrete modems are still built on TSMC silicon and it could be a couple of years before they end up on the die of an Intel SoC built in an Intel fab. While Intel could roll out the first two-chip solution next year, it’s highly unlikely that it will have a proper integrated solution before 2015.

This is a bit of a problem for more reasons than one. Many analysts don’t dig deep enough, some of these technical issues go under the radar – so they stick to Intel’s promise of LTE in 2014. Quark is also being overhyped, although it won’t generate any significant revenue over the next few years. Many analysts also believe x86 support is still a big deal, and to some extent it is, but the relevance of x86 is often exaggerated and it is diminishing as we speak. That is why Intel is talking up hybrids, or 2-in-1s – because legacy x86 support is a lot more important for hybrids than regular tablets. In smartphones, x86 support is as useless as a Facebook share button on a porn site.

However, this is where it gets interesting, because Intel is also promising $99 Bay Trail tablets. Back at IDF, Krzanich said Intel’s new tablet platform would “go below $100 by Q4 2013,” giving the impression that Intel can do dirt cheap tablets as well. We are not sure that it can, not unless it subsidizes them with heaps of cash, and we all know how well that went with Ultrabooks.

As for phones, Intel is still dead in the water and this won’t change anytime soon. Apple is quite happy designing its own custom chips and having them built by the lowest bidder. Samsung is going for off-the-shelf IP and manufacturing its Exynos 5 chips in 28nm, and it will hit 20nm soon. Qualcomm dominates the market and Intel can’t erode its lead over the next couple of product cycles. Even if Intel comes up with competitive smartphone chips in a year or two, who will they be for? Apple won’t buy them, neither will Samsung. This would leave Intel in an awkward position of fighting over scraps with heavy hitters like Qualcomm and a range of smaller ARM players like Nvidia and MediaTek.

This is hardly a viable long-term mobile strategy. Intel is basically doing the only thing it can – and doing the only thing that can be done and calling it a strategy doesn’t really make for much of a strategy.

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Intel Goes AI

Intel has written a check for the Spanish artificial intelligence technology startup Indisys.

The outfit focuses on natural language recognition and the deal is worth $26 million. It follows Intel’s recent acquisition of Omek, an Israeli startup with specialties in gesture-based interfaces. Indisys employees have joined Intel already. Apparently the deal was signed on May 31 and the deal has been completed.

Intel would not confirm how they are using the tech: “Indisys has a deep background in computational linguistics, artificial intelligence, cognitive science, and machine learning. We are not disclosing any details about how Intel might use the Indisys technologies at this time.”

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Intel Wins Patent Case

Intel has had a previous decision upheld by the US International Trade Commission (ITC), which decided it did not infringe several X2Y chip manufacturing patents.

X2Y had claimed that Intel’s chip manufacturing technology infringed five of its patents and requested an injunction to stop the chips from entering the US. Previously Judge David Shaw ruled that Intel did not infringe X2Y’s patents, a decision that has been upheld by the ITC, which said it will “terminate the investigation with a finding of no violation”.

X2Y’s patents relate to the shielding of electromagnetic interference that is a significant problem in electronics manufacture. The firm has sold licenses to other chipmakers including Samsung, however Intel decided to develop its own techniques, which are now deemed not to infringe X2Y’s patents.

Intel has had a previous decision upheld by the US International Trade Commission (ITC), which decided it did not infringe several X2Y chip manufacturing patents.

X2Y had claimed that Intel’s chip manufacturing technology infringed five of its patents and requested an injunction to stop the chips from entering the US. Previously Judge David Shaw ruled that Intel did not infringe X2Y’s patents, a decision that has been upheld by the ITC, which said it will “terminate the investigation with a finding of no violation”.

X2Y’s patents relate to the shielding of electromagnetic interference that is a significant problem in electronics manufacture. The firm has sold licenses to other chipmakers including Samsung, however Intel decided to develop its own techniques, which are now deemed not to infringe X2Y’s patents.

While Intel had the most to lose, X2Y also went after Apple and HP, two of Intel’s highest profile customers. Intel even argued that an injunction on its chips would hurt American jobs.

Not only did X2Y lose its patent battle with Intel, but two of its patents were ruled invalid. The company had filed two civil lawsuits that were put on hold pending the ITC’s decision, but given the ITC action it will be surprising if the firm continues in its legal campaign against Intel.

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No LTE On IBM’s SoC Until 2014

Intel is working on integrated LTE modems for its upcoming SoC designs, but CEO Paul Otellini claims they will not be ready for prime time until 2014.

In a recent conference call Otellini was directly asked about Intel’s plans for LTE integration and said “higher levels of integration” are expected next year. He went on to say that the first Intel-based phones with LTE should launch in early 2014, in time for the Mobile World Congress.

Otellini said Intel’s wireless team, formerly a business unit of Infineon, is making good progress in LTE.

“We believe we have a very competitive solution. The Infineon team is known for not necessarily being first to market, but being really good at engineering a very solid solution and being cost effective and cost competitive and I think that they are doing a very good job with respect to this product,” said Otellini.

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Is Intel Really Catching ARM?

A new report suggests that Intel is close to matching ARM on power efficiency.

The study by Bernstein Research analysts said that the days of Intel being mocked because its power-hungry chips shortened the battery life of mobile devices could be over. Bernstein noted that the ARM camp has such a commanding lead in phones and tablets that Intel probably won’t make much of a dent in those markets for a couple of years — even with its energy-efficient chips.

But it said that both company’s chip types “are very close in terms of power efficiency and processing power.” It said that the fight between the ARM and Intel camps will heat up meaningfully as early as 2013, with likely damages on both sides and no winner. For its study, Bernstein compared Intel’s chip in a Motorola RAZR phone and a RAZR phone with an ARM chip. It also compared both chips in similar tablets outfitted with the Windows 8.

The bad news in the report for Intel was that ARM’s chips have become more powerful, making them “a very compelling choice” for consumers looking for low-end notebooks.

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Intel Details 22nm SoC

Thanks to a long spate of bad luck over at AMD, Intel now finds itself in a rather safe market lead, at least in high-end and server markets. However, in the low-end and mobile, Intel has a lot of catching up to do.

ARM still dominates the mobile market and Intel is looking to take on the British chip designer with new 22nm SoCs of its own. Intel outlined its SoC strategy at the 2012 International Electron Devices Meeting in San Francisco the other day.

The cunning plan involves 3D tri gate transistors and Intel’s 22nm fabrication process, or in other words it is a brute force approach. Intel can afford to integrate the latest tech in cheep and cheerful 22nm Atoms, thus making them more competitive in terms of power efficiency.

Since Intel leads the way with new manufacturing processes it already has roughly a year of experience with 22nm chips, while ARM partners rely on 28nm, 32nm and more often than not, 40nm processes. Intel’s next generation SoCs will also benefit from other off-the-shelf Intel tech, such as 3D tri-gate transistors.

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Samsung Plans To Go Low-End

Samsung Electronics Co, the world’s top television maker, has seen TV sales firming up so far this year and plans to launch cheaper TVs, as demand for lower-end models increase, the head of its TV business said on Wednesday.

Demand for lower-end TVs has been increasing in recent months as major South Korean retailers such as E-Mart Co introduced flat-screen models that are as much as 40 percent cheaper through alliances with small local manufacturers.

“As long as there’s demand, we’re open to get into that segment,” Kim Hyun-suk, executive vice president of Samsung’s visual display division, told reporters.

“We’ve been preparing to introduce cheap models and have been studying to optimize production costs and retail prices. Those (cheap) models will be ready for sale in one or two months.”

Samsung, the most profitable TV maker, also introduced on Wednesday its highest-end premium set that it hopes will help boost profitability, as a fragile global economy threatens to sap demand growth this year after no growth in 2010.

The ES8000 model has voice, motion and face recognition functions, as well as 3D and Internet-enabled capabilities. The models, available in sizes of between 46 and 65 inches, will go on sale from this weekend in South Korea before a global launch in March.

Kim said Samsung’s TV sales so far this year have been stronger than a year ago and demand from China remained solid.

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Is Samsung Flip Flopping?

Samsung is apparently rethinking its decision not to bring Android 4 to the Galaxy S and Galaxy Tab.

Earlier the company stated that neither device could be updated due to the size of Samsung’s TouchWiz interface. The news created a bit of an issue with users sharpening scythes, pitchforks and lighting torches to go on a lynching. Now word on the street is that the company is considering backing down on its decision due to “strong customer demand.”

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Will Android Tablets Get Ice Cream Sandwich?

Google just held its Galaxy Nexus event in Hong Kong and we read just about every report and release in detail, only to find that Google didn’t even mention Ice Cream Sandwich Android 4.0 for tablets, which is somewhat surprising.

At this time, there is no official information if and when Android 4.0 comes to tablets. Since Android 4.0 looks like the lovechild of Gingerbread and Honeycomb and gets a few new options, it’s likely that we will see Android 4.0 on tablets, with a few tweaks of course.

Google just don’t want to talk about it, at least not yet. Since Google chaps already said that Android 2.3 capable phones should be able to run Android 4.0 this definitely applies to any Android 3.x tablets since most of them have dual-core processors and quite powerful hardware to back it up.

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Flaw in Intel’s 320 Series SSD Confirmed

There had been talk on the Internet in reference to the nasty bug discovered and reported on Intel’s support forums regarding the data loss on its recently released 320-series SSDs and today, Intel has finally and officially confirmed it.

The users have mentioned that under power failures, the drive reverts back to 8MB capacity and thus looses all the data stored on the drive. According to preliminary reports the drive tries to reconnect with the SATA port rather than to go for a proper shutdown.

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