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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.  

Intel

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.


Moorefiled
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: PCWorld.fr]

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



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Cherry Trail
By lagomorpha on 2/25/2014 12:23:50 PM , Rating: 2
So once Cherry Trail switches from PowerVR to Intel Graphics, what's to stop a company from producing a 6" 'phone' with a full copy of Windows 8.1 (NOT Windows Phone 8.1) and an application to access the phone features?

That seems a lot more useful than a phone with a crippled phone OS.




RE: Cherry Trail
By Argon18 on 2/25/2014 1:31:44 PM , Rating: 1
Well, the cost for one. No consumer is going to pay the Microsoft tax on a cell phone. What you're proposing is a $1000+ phone, and that ain't gonna fly.


RE: Cherry Trail
RE: Cherry Trail
By lagomorpha on 2/25/2014 3:11:50 PM , Rating: 3
If Dell and Lenovo can sell 8" tablets with Windows 8.1 for $250 (not subsidized) I doubt putting it on a 6" phone would drive the price over $1000.


RE: Cherry Trail
By Shadowmaster625 on 2/27/2014 10:18:02 AM , Rating: 2
The problem is that windows 8 is so frickin terrible that no one would want it on a phone. It has no apps compared to the other two competitors. That's never going to change. The interface is just a mess, terribly clumsy, badly coded, with 20 years of bugs worked into it. And slow. God awful dog slow. At least with a haswell cpu the bugs can be more easily dealt with. But with an underpowered cpu adding lag to the mess of bugs is just going to cause people to throw their phones out the window.


RE: Cherry Trail
By lagomorpha on 2/27/2014 1:35:14 PM , Rating: 2
So you're saying you've never used a Bay Trail Win8.1 tablet.

They're fast, by far the most responsive tablets I've ever used. The problems with Windows 8 all stem from the touch interface taking precedence over the traditional keyboard/mouse interface. Windows 8 is crap on a desktop, works great on a tablet.

And who needs "apps" when nearly every piece of Windows software will run? You don't need approval from the OS vendor to run your software, you can install whatever you want. You can even write your own without having to get a developer license.


Dell, Lenovo?
By Milliamp on 2/25/2014 8:23:24 AM , Rating: 2
Dell couldn't make a successful push into mobile if their lives depended on it. Even if Intels chips were 4x more powerful than anything on the market and half the cost Dell could never manage to assemble a phone and not mess up at least the version of Android on it.

If Dell could blink and have a phone identical in specs to the S5 to launch tomorrow they couldn't be successful with it because its not their competency.

Part of Intel's problem though like the article said is the big players are now integrating LTE, Bluetooth etc. support into the chip so even if Intel is fast for the power it uses it's still a step behind.

OEM's are always happy to welcome another player to keep their other vendors in check but they aren't about to move away from Qualcomm and Broadcom any time soon. Even Samsung has a competent mobile chip.




RE: Dell, Lenovo?
By Flunk on 2/25/2014 11:08:25 AM , Rating: 3
10 years ago people would have said the same about Apple and then they revolutionized the industry. Don't count Dell out just because they've failed to perform in the past.

By that logic companies should never expand product lines because "it's not their competency". Besides, with the PC industry where it is what other option did they have?


More competition is good
By StormyKnight on 2/24/2014 10:19:07 PM , Rating: 2
I'm all for more competition. Still, Intel has to show a good working product or products. I'm sure the other MFGs are casting a wary eye. Intel is no slouch and has deep R&D pockets. They have proven where they don't intially succeed, they keep sucking until they do succeed. Willamette P4 anyone?

I think they have a way to go before they unseat ARM as a SOC of choice in the mobile market. But choice is good. Competition is good, especially for the end user.




RE: More competition is good
By coburn_c on 2/25/2014 12:43:03 AM , Rating: 2
I agree, how serious can they be about their chips if they didn't show up with a reference design?


Sigh....
By zodiacfml on 2/25/2014 3:34:35 AM , Rating: 2
Intel could have been in a better position if they took Atom seriously ever since. I still remember Atom touted being the chip for many devices.

They probably held it back back in the day so that it won't be as good as the Core. Now they're paying the price.




bad paragraph
By TheSchnoz on 2/25/2014 3:33:22 PM , Rating: 2
quote:
Later in H1 2013 (like Q2 2013), 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 20 nm.


I think you mean 2014, not 2013, and 28nm, not 20nm.




Errors in article
By IntelUser2000 on 2/26/2014 5:43:36 AM , Rating: 2
Few things wrong here:

Cherry Trail isn't the first to feature HD Graphics. Bay Trail is. It's just in smartphones they are using PowerVR.

Also, contra revenue is different than giving away, even though the results are same in terms of earnings/revenue perspective.

Bay Trail PLATFORM currently costs more than ARM chips. Even if Intel sells Bay Trail chip for say, $20, the platform might cost extra $20 to make. So Intel pays for the difference.

That contra-revenue goes away with 14nm Cherry Trail, because the platform will be optimized for cost. If its like what the article says, then Intel will NEVER profit. Fortunately, that's not the case.




back to its old games
By BRB29 on 2/25/14, Rating: -1
RE: back to its old games
By tayb on 2/25/2014 9:06:53 AM , Rating: 4
How can a company with 0.4% of smartphone CPU shipments be doing anything that is considered anti-competitive/monopolistic?

They are trying to encourage adoption. I have a flyer in my hand from AT&T that is offering a $25 discount on an AT&T share value plan if I sign up for Next on at least one line. That's a free phone once you factor in the discount.


RE: back to its old games
By Argon18 on 2/25/14, Rating: 0
RE: back to its old games
By TheSchnoz on 2/25/2014 4:12:07 PM , Rating: 2
But thats not the same thing at all. Microsoft had a monopoly on the operating system that the browser ran off of.


RE: back to its old games
By name99 on 2/26/2014 6:36:38 PM , Rating: 2
I think you are correct.

Where they WILL hit trouble is if they try to tie sales of desktop CPUs to mobile CPUs (eg Asus doesn't get the newest Broadwell Y's the day they ship unless they're buying some minimum number of Atoms...)

Would they be stupid enough to try that? Who knows. Every few years you get a new generation of MBAs, fresh from having their morality stripped out of them at business school, and convinced that they are so smart the government will never catch them even if what they are doing is technically illegal.


RE: back to its old games
By ilt24 on 2/25/2014 10:25:39 AM , Rating: 2
quote:
Why does the best player in the game need to resort to this?


Currently Intel's low-end SOC's that they are trying to push into the sub $300 tablet market are lacking some wireless/comms features found in the SOC's from their ARM competitors. The features are added via a support chip. Not wanting to wait until their next generation to get into the market, they have decided to provide these support chips as well as provide some other money to offset having to go with a two chip design to offset their current disadvantage.


RE: back to its old games
By Motoman on 2/25/14, Rating: 0
RE: back to its old games
By IntelUser2000 on 2/26/2014 5:46:30 AM , Rating: 2
No it isn't. Currently the Bay Trail platform, don't confuse with CPU, costs more than competitors because they originally meant it for higher end devices. Things like supporting SATA, and such.

With future derivatives, like Cherry Trail coming end of the year, that goes away, and Intel no longer needs to pay it.

quote:
Why does the best player in the game need to resort to this?


They are not. They are horrendously uncompetitive in this market.


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