New commitments sound promising, but Intel has a history of disappointing in the smartphone and tablet space

With mobile fast-becoming the most-important type of computing in most casual consumers' lives, Intel Corp. (INTC) looked only slightly less lost last year than it had the previous several years in the mobile market.
I. Merrifield -- An Intel Smartphone Chip Worth Buying?
At mid-year last year, Intel chips were found in only 0.2 percent of smartphones sold worldwide, and only 6 percent of tablets sold, according to research by Strategy Analytics [1][2].  Intel is desperate to change that.
In Q3 it launched a new series of 22 nm tablet chips (core: Silvermont; SoC: ValleyView; chipset: Bay Trail) which it referred to generally as "the Bay Trail platform" or "Bay Trail-M".  At the time, it teased at Bay Trail-T's upcoming Silvermont-based smartphone companion. Early this morning at the 2014 Mobile World Congress (MWC) in Barcelona, Spain Intel announced the availability of those third generation mobile chips, dubbed Merrifield.
Intel Merrifield
A Merrifield die

The first Merrifield 22 nanometer system-on-a-chip (SoC) is branded as the Intel Atom Z3480.  It is designed to pair with an Intel XMM 7160 that handles the digital to analog conversion of signals coming into and off of device antennas.  Announced last October, that cellular modem supports downlink speeds of up to 150 Mbps (Megabits-per-second).
The processor has one major thing in common with its rivals, who base their chips on ARM Holdings plc's (LON:ARM) architecture -- the onboard GPU. 
Both Intel and the ARM chipmakers make heavy use of UK-based Imagination Technology Group Ltd.'s (LON:IMG) PowerVR chips.  While Intel may eventually look to move to its own in-house graphics solution (e.g. Iris) which it uses on its personal computer chips, for Merrifield it opted for PowerVR 6 ("Rogue") Series GPUs

PowerVR 6XT "Rogue" roadmap

The PowerVR 6 series GPUs are expected to power many of the high-end smartphones this year, plus they're already found in the A7 SoC used in the Apple, Inc. (AAPL) iPhone 5S.
While Intel's GPU may be the same as the ARM chipmakers', it will likely sip less power as it will be built on a 22 nm die, versus the 28 nm node size most ARM chipmakers are currently using.  


The new chip was rumored to be available in quad-core configurations, but it will actually be dual-core exclusive.  It does add brand new out-of-order instruction execution capabilities for reduced power consumption.  LPDDR3 is also supported at speeds up to 533 MHz.  The total amount of supported memory is bumped from 2 GB to 4 GB.  The chip also is Intel's first to feature on-die sensor input (from touchscreens).  It also upgrades the image signal processing (ISP) coprocessor, supporting slightly higher front-facing camera resolutions and 60 frames per second video @ 1080p.
You'll be able to recognize Merrifield chips as they're expected to all be branded as Z34xx chips.
II. Fresh OEM Commitments Raise Intel Supporters' Hopes
Along with the new chips Intel announced commitments from four new partners:
All of these OEMs previously toyed with Intel-based smartphones, but this is their first commitment to volume contracts.  The Dell one is particularly interesting, given that last fall Michael Dell said he "wasn't interested" in selling smartphones.

ASUS is among the OEMs to pledge support for Atom smartphones.

The proof, however, is in the sales.  Acer had previously committed to use the Z2420 smartphone chip, but only released handsets with it in a handful of developing markets. Motorola had previously committed to produce Android smartphones with Intel chips and even released a major handset (the Motorola i), but Intel's 0.2 percent market share last year showed Motorola sold very few of the Intel-equipped smartphones.  Still, this is a development to watch as previously only Motorola and a handful of foreign OEMs had launched Intel-equipped designs.
Android is currently the only platform to support Intel chips, but Windows Phone 8.1 is rumored to add support for Intel chips, and Firefox OS is also rumored to be working to add Intel compatibility.
III. Big Design Win for Intel Chipset Almost a Done Deal
Intel also announced a major design win on the chipset front.
It's ARM-compatible XMM 7160 LTE chipset is close to being picked up by Samsung Electronics Comp., Ltd. (KRX:005930) (KRX:005935) for use in a future variant of the Galaxy S5 smartphone, according to comments given in an interview by Hermann Eul, head of Intel's mobile chip business.

The Samsung Galaxy S5

The mainline model of the Galaxy S5 -- announced today -- uses a Snapdragon 800 chipset from Qualcomm Inc. (QCOM).  The Intel solution would likely be inserted into device variants utilizing Samsung's in-house Exynos SoCs, which lack a dedicated chipset.  Intel's LTE chips are expected to be the cheaper option, but will likely use more power than Qualcomm's modems.  They also are expected to support fewer cellular standards that Qualcomm's chips.
Comments Intel, "The interest in LTE is high.  Everybody wants an alternative [to Qualcomm]."
IV. Intel's Surprising Process, Feature Deficit on the Chipset Front
Intel's last generation Intel's PMB9820 baseband processor was found in certain last-generation Galaxy S4 models (namely the Exynos-equipped GT-I9500), according to teardowns, but that win flew largely under the radar.  Chipsets are the one area of mobile that Intel has done well in, continuing Infineon's modest success.
It might come as a surprise to some, but for all its process prowess, Intel isn't very good at making cellular analog and digital signaling circuitry.  It only has been at the process for three years, following the 2011 acquisition of Infineon -- a chipset maker who always relied on third-party fabs.  Intel doesn't fabricate its cellular modems.  It contracts them to Taiwan Semiconductor Manufacturing Comp., Ltd. (TPE:2330) (TSMC).

Baytrail modem
Intel's LTE modem (left) is based on a 28 nm process, while the next-generation successor to the Qualcomm modem pictured (right) is built on 20 nm process. [Image Source: AnandTech]

TSMC also produces Qualcomm's modems. Last year's stock was produced on TSMC's 28nm HPm lines, such as the Gobi MDM9x35 modem.  But Qualcomm just announced the availability of new Gobi 9x30 modems that will be produced at 20 nm.  In addition to having the superior contract with TSMC, Qualcomm also is a step of Intel in terms of supporting cutting edge technologies like LTE 300 Mbps downlink speeds via carrier aggregation.
Intel is, in effect, competing for third place in chipset sales against Broadcom Corp. (BRCM) which trails Qualcomm in chipset sales.  Broadcom isn't going to give up easily -- it just announced the BCM 4354, an advanced 802.11ac modem which supplements its 3G/LTE offerings.  The new modem supports 867 Mbps downlink speeds via 2x2 MIMO.  It also includes Bluetooth 4.1 support, FM radio, and support for charging control with the new Rezence wireless power standard.
Its RF 360 wireless companion chip also supports 802.11a and Bluetooth 4.1.  Qualcomm also has 802.11ac and Bluetooth 4.1 support for smartphones.  Intel has yet to support 802.11ac in a mobile chipset (it has a pair of desktop/laptop geared 802.11ac chipsets).  And while it does offer a Bluetooth via the Infineon acquired BlueMoon PMB 8763 solution, the latest model (V3) only offers Bluetooth 3.0 standards support.
But for all those shortcomings Intel's XMM 6260 -- a HSPA+ chipset -- has been a top seller in this space, and its 7160 is seeing modest uptake as well, giving Intel's a legitimate shot and getting to second place.
V. Moorefield, XMM 7260 LTE Advanced, and Cherry Trail
Intel already has tipped its hand regarding its upcoming releases for the rest of the year.

Moorefield will pack quad-cores, Cherry Trail will be the 14 nm die-shrink, and SoFIA will pack an on-die modem.

Later in H1 2014 (like Q2 2014), it will release a new modem -- the XMM 7260 -- that will bump LTE to Category 6, with support for 300 Mbps carrier aggregation boosted downlink speeds.  The new LTE chipset is paired with a SMARTi 45 transceiver chip die to offer single-chip (multi-die) carrier aggregation (CA).  The bad news is that the new modem will still be stuck at 28 nm.
Intel 7260The Intel 7260 LTE Advanced modem is coming in Q2 2014.

Intel expects to continue trailing Qualcomm in terms of chipset process size until 2 to 3 years from now when it is able to bring production of its cellular chips back into its own fabs.  Still, Intel hopes to establish itself as a strong second in LTE chipset sales via aggressive pricing to make up for its feature and process deficit.
On the applications processor front, Intel plans to in H2 2014 launch a 22 nm quad-core upgrade to Merrifield, dubbed Moorefield.  Then in "late 2014", it plans to launch its first 14 nm smartphone chip, whose chipset is dubbed Cherry TrailCherry Trail will feature Airmont cores, the die-shrink of Silvermont.  While the main gain will be power efficiency, the chip will critically ditch the third party graphics for Intel's own in-house solution -- Gen 8 HD.

Bay Trail smartphon
Herman Eul, Intel mobile VP, teases at Airmont at IDF 2013.
[Image Source: Jason Mick/DailyTech LLC]

The Gen 8 HD modular graphics execution units (EUs) are the same designs that power the PC-geared 14 nm Broadwell chips.  The smartphone Intel graphics will pack 16 EUs.  According to Computer World, Broadwell will incorporate 48 EUs for the GT3 (Iris) SKUs; so the smartphone gets about a third of the computation units as Intel's premium PC solution.  Of course there's likely to be a GPU clock speed difference as well, but that gives you the start of an idea regarding possible performance.

VI. FINALLY an On-Die LTE Modem in Q1 2015

There's a bit of an oddity in Intel's roadmap, though.  Late in H2 2014, Intel's mobile chip line will split in two.  On the value end is SoFIA, a chip design that Intel took on with the acquisition of Infineon and modified.  The chip was a planned Infineon ARM smartphone design.  Intel's swapped out the ARM cores for Silvermont cores.  The chip has an on-die 3G baseband processor.  It will likely launch in Q4 2014.  It will be followed by an LTE variant (possibly with Airmont cores) in Q1 2015.

For now Intel is making the pitch that not having the LTE on-die is a "feature", as it allows faster adoption of new technologies -- like carrier aggregation -- at the OEM level and the inclusion of multi-mode modems for "world phones".

Intel SoFIA

This is arguably true, but it overlooks why Intel is planning an LTE-sporting chip of its own -- cost and space.  For those reasons Qualcomm's and NVIDIA Corp.'s (NVDA) applications processors both feature on-die modem solutions.
From a big picture, Intel appears to be catching up in the applications processor race, and it’s poised to differentiate its smartphone line later this year with the inclusion of its lauded in-house graphics solution.
But on other fronts -- like the inclusion of on-die LTE baseband processors, Wi-Fi/Bluetooth chipsets, and feature side of wireless chipsets -- Intel lags behind rivals like Qualcomm, NVIDIA, and Broadcom.
VII. Could Intel's Tablet Chip Giveaway Expand to Smartphone Space?
The thing that could end up tipping the scale in Intel's favor is its growing desperation.
For obvious reasons (profits) and slightly less obvious reasons (antitrust scrutiny), Intel avoided aggressive price tactics that were within its means to do.  But that could be changing.
After its Q4 2013 earnings report Intel Chief Financial Officer (CFO) Stacy Smith created a stir when he announced Intel's secret method to hitting its target of 40 million Bay Trail tablets "sold" -- give away most of these chips.

Intel CFO
Intel CFO Stacy Smith [Image Source:]

Intel's slides discuss something called "contra-revenue".  According to Russ Fischer of Seeking Alpha, this means that Intel will hand out tens of millions of "sample" chipsets -- gifts of sorts to tablet OEMs to encourage adoption.

Intel tablet contra revenue
Intel is giving away some of its tablet chips for free to try to stoke interest.

This approach will, of course, be impossible to compete with, but costly.  Intel has said this action will drop its gross margin by 1.5 points.  According to Mr. Fischer, this could equate to roughly a billion in lost revenue.  And it could cost even more if antitrust regulators in the EU decide it's an anticompetitive tactic and fine it again (note: ARM is headquartered in Cambridge, UK; the UK is an EU member state).

Bay Trail -- chipset

The method isn't a complete loss on the hardware.  Intel will still sell the chipset -- but will discount the application processor + chipset bundle cost to the point where its cheaper than rival ARM chips, which in all likelihood are slower, but cheaper.  That means big losses for Intel, and possible antitrust scrutiny.  But anyone can tell you that giving away free stuff is going to make your popular.

Sources: Intel, VentureBeat, AnandTech

"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki

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