Tag: Qualcomm

PC slump may actually benefit AMD in long run

AMD, SunnyvaleIt is often said that a crisis is merely an opportunity in disguise. It is often said but it’s rarely true. However, the steep drop in PC shipments could in fact be good news for AMD.

Ten years ago AMD taught Intel a costly lesson in the high end, forcing Intel to regain its footing and invest heavily in R&D and manufacturing. As a result Intel squeezed AMD out of the high-end consumer CPU market, relegating it to the mid range and low end.

AMD wasted its opportunity, but eventually it picked up ATI a couple of years after its CPU design peaked. Things looked bright for a moment, just before they went terribly wrong. AMD suffered from poor execution and its high end chips just weren’t good enough to keep up with Intel. The K8 glory days are long gone and AMD is now a different company, it is fabless, but it also has plenty of IP, competitive graphics and very interesting APU and x86 SoC designs.

So how could the weak PC market benefit AMD, especially now that mobile chips are the new black, and AMD hasn’t got any?

Long upgrade cycles are one indicator that the era of “good enough” computing is already here. The average PC is more than four years old, few people need costly high end processors and attention is shifting to low end and mid range silicon. This is what AMD is becoming good at. Its new Jaguar based APUs are brilliant and they are superior to Intel’s current generation of Atoms. Richland based APUs aren’t as competitive, but they offer relatively good value for money and they are making inroads in the ULV market as well. The bad news is that AMD is still suffering from execution problems. Kaveri was supposed to replace Richland later this year, but it has been pushed back to early 2014, along with desktop Jaguar-based Kabini parts. AMD’s propensity for delays makes any forecast extremely difficult.

With very little need for Intel’s high-end x86 chips in the consumer market, gamers and professionals aren’t enough. This is an obvious opportunity for AMD and CEO Rory Read seems to get it. That might explain why AMD is focusing its efforts elsewhere. APUs are just part of the story, they were the logical next step in CPU evolution. AMD’s next big thing is custom chip design. The Xbox One and PS4 are based on Jaguar, with AMD graphics in tow. Now for some geeky figures.

Most people associate Jaguar with cheap and small APUs, but custom console SoCs are neither. Built using TSMC’s 28nm process, the SoC used in the Xbox One actually features eight Jaguar CPU cores, coupled with powerful graphics and plenty of SRAM embedded on the die. They pack around 5 billion transistors, while Intel’s mid-range Haswells are said to feature between 1.4 billion and 1.2 billion, depending on the SKU.

AMD hasn’t forgotten how to do huge, immensely complex chips – it’s just not doing big x86 cores anymore. Its high-end GPUs also have upwards of 4 billion transistors. What’s more, AMD can apply the same custom approach to server parts and it’s also working on ARM based server chips as well. This flexible, modular approach sounds very interesting indeed, but it’s still too early to say whether AMD will put it to good use in server chips, so to speak,  whether it will manage to find enough customers for custom parts, as the orders have to be relatively big to justify the expense of developing and producing such chips.

As far as AMD’s graphics business goes, it is doing rather well at the moment. Time and again AMD has proven that it can go toe to toe with Nvidia and win a few rounds. We’ve been looking at a virtual stalemate for the past five years. This year AMD managed to increase its GPU market share, despite the fact that Nvidia won nearly all Haswell notebook design wins. The trouble for Nvidia is that notebook graphics are a dying market. In the consumer space AMD is doing well, while Nvidia still maintains a big lead in high-margin professional graphics. The recent console wins should also help AMD’s consumer GPU business, as developers should find it easier to optimise their games for AMD’s architecture on three different platforms.

The big question is mobile. A couple of months ago Nvidia announced that it would license its Kepler GPU and future GPU IP to third-party ARM SoC builders. AMD has not made the same commitment, but some AMD graphics tech is already used in mobile chips, in the form of Qualcomm’s Adreno graphics. The ARM SoC business will continue to grow and we are bound to see more consolidation. Nvidia has a small presence in the ARM SoC market and if it is willing to license its technology to its own competitors, AMD could and should enter the market as well. It is worth noting that Adreno is running out of steam, as it is based on old AMD/ATI tech. We’re not sure it would make financial sense for Qualcomm to continue development in-house, it might reach out to AMD instead. There is very little overlap between Qualcomm and AMD at the moment, and such a marriage of convenience would make perfect sense. If that happens, AMD could end up with a huge market share in ARM SoC graphics, trumping Nvidia, ARM and Imagination.

AMD is still in a world of trouble, but looking ahead it might actually be in a better position to weather the storm than Intel, at least in the consumer space. High end chips and server parts are still Intel’s turf, although AMD could score some custom server wins in the future. Intel is pushing mobile now and it has a good chance of penetrating the market a couple of years from now, but in reality if AMD starts licensing GPU IP to the likes of Qualcomm, it could make heaps of cash in mobile, with a lot less investment and risk than Intel.

Microsoft hit by $900 million Surface RT write-down

surface-rtMicrosoft announced its fiscal Q4 results last night and unsurprisingly the results missed expectations by a wide margin. The PC market remains slow, hence Redmond’s numbers can’t be good. The company reported revenue of $19.9 billion and earnings of $4.97 billion.

However, Microsoft’s attempt to tap the tablet market seems to have failed quite spectacularly. Redmond announced an embarrassing $900 million inventory write-down for Surface RT tablets. So, instead of helping the company out, the Surface burned a massive hole in its pocket.

Last week Microsoft slashed the Surface RT price by $150 in an apparent effort to clear inventory. The company is already working on the next generation of Surface RT products and it apparently includes two different form factors. The problem is that nobody else appears to be working on RT devices – in fact vendors seem to be running away from it like a particularly nasty flu bug.

The only companies who still seem to be supporting Windows RT are Qualcomm and Nvidia, which comes as no surprise since they are supposed to build the chips for next generation Surface devices. In a recent interview with Computerworld, Nvidia vice president of computing products Rene Haas said the chipmaker is still committed to Surface RT and Windows RT. He said he is excited by the “new price point” which might inspire new sales.

However, analysts are having none of it.

J. Gold Associates analyst Jack Gold said that Nvidia is simply marketing its product. “They don’t want to spook the market and say RT sucks and won’t sell,” he said. Analyst and ex-AMD and Compaq employee Pat Moorhead thinks Microsoft won’t ditch the platform anytime soon – even if it means that it will be the only OEM using it.

However, even Microsoft can’t afford such write-downs every couple of quarters and something has to change soon, or it will have another Zune on its hands.

The writing is on the wall for Windows RT

surface-rtOver the last week or so we witnessed a flurry of Windows RT news, some positive, some very negative indeed. Late last week Microsoft decided to slash the prices of the Surface RT by as much as $150 in an effort to make the uncompetitive tablet a bit more appealing to the average consumer on the prowl for a cheap media tablet.

In June, Microsoft announced that it would release Outlook 2013 for Windows RT tablets, which is clearly an attempt to gain a bit more traction in the enterprise segment. The decision not to include Outlook in Windows RT at launch was baffling, and still is. The first reviews of Outlook 2013 for RT are in and they are positive, but it really should have been included months ago. With the upcoming 8.1 update, it should land on all RT devices, provided there are still RT devices by the time it appears.

This is no laughing matter, the lack of actual Windows RT products is becoming a serious concern. For example, Lenovo has just dropped the Yoga 11 convertible from its web shop. Dell and Asus have also slashed the prices of their RT tablets. Some players like HP ignored Windows RT altogether, while some gave it a go and dropped it, like Samsung. What’s more, all vendors are focusing on proper Windows 8 tablets instead, based on x86 chips.

In fact, the only hardware maker that still seems to be taking Windows RT seriously is Microsoft itself. The Surface RT price cut is a way of clearing inventory and making room for the next generation Surface RT, or a couple of them. At this point it seems that Microsoft is working on two different designs. One is reportedly based on the Qualcomm Snapdragon 800 SoC, while the other one will be powered by Nvidia’s Tegra 4. Rumours of a smaller Surface RT have been floating around for months and there is a good chance Microsoft will roll out a 7- to 8-inch design along with a new full-size 10.6-incher.

Unfortunately it seems to be too late. Future Windows RT tablets, including the Surface RT in both rumoured flavours, will now have to compete with tablets based on Intel’s new Bay Trail chips. This was not the case last year, when the Surface RT was opposed solely by ARM based Androids and iPads. Now it will face tough in-house competition in the form of Windows 8.1 tablets powered by Intel’s x86 Atoms. What’s more, Bay Trail is shaping up to be a beast. It is said to be faster than the Snapdragon 800 and it doesn’t need much power, either.

With new x86 SoCs from Intel and AMD coming online, it is hard to see why Microsoft would want to stick with a specialized tablet OS, designed for ARM. The next generation of Windows 8.x tablets is expected to end up a lot cheaper than the first generation, leaving very little wiggle room for Windows RT. Small wonder then that many brands aren’t getting on board, since they seem to believe Windows RT will be dead as disco within a generation or two.

It seems that the only practical way to keep Windows RT alive in the long run is to stick it on dirt cheap tablets designed to take on bargain Androids in the 7- to 8-inch range. This probably won’t work, as Windows RT is rather bloated and it’s far too expensive to make sense on such cheap devices, unless Microsoft agrees to practically give it away for free. Since we are talking about Microsoft, this will happen when hell freezes over. In theory at least, Microsoft could keep Windows RT alive, but we’re really not sure it should.

Asian tablets will win the day

Keep taking the tabletsAs I was having a mango and orange juice round the corner from the somewhat unique hotel I’m staying in here in Old Taipei, I had an invitation from Sascha Pallenberg, I popped round to pay a visit to Mobile Geeks, and it was something of an eye opener.

Sascha, and fellow reporter Nicole Scott, have offices in rather a swanky building on the 11th floor of an office block near the metro. Obviously they are gearing up for next week’s Computex but we had time for a chat about the state of the tablet market.

Sascha showed me two tables – one Chinese one sells for $35, while the other, a well built machine from Ramos, sells for $225.  Both are Android devices and Sascha tells me there are dozens, maybe hundreds of these babies manufactured in China, which obviously has implications for the big boys, the Taiwanese boys and, well, the whole world. Heck, you could bundle a $35 notebook with a carton of cigarettes, I suggested.

Can you obtain these machines in the USA and Europe?  Well, you can certainly get hold of the Ramos machine – check out its site here.  But most of the tablets, Sascha suggested, were destined for the Asian, Indian and African markets, where no one can lash out the amounts of cash Apple and others expect.

The real question for me is how vendors can possibly expect people to pay vast sums of money in the USA and Europe when it’s obviously not hard for the Chinese to master manufacturing and with a bill of materials at a considerably less cost.  Surely it can only be a matter of time before the majors are forced to slash prices to match the Chinese offerings – and then it will be a case of just how they can make such big margins as they do now, in the future.

And with the heady mix of Windows tablets, Android tablets battling it out, where exactly is this going to leave the old guard – Microsoft and Intel?

Chip revenues down

arm_chipRevenues for the global semiconductor market dropped two percent year on year to $295 billion in 2012, IDC’s latest semiconductor application forecast reports.

Consumer spending slumped in the second half of the year which had a significant impact, but this was also combined with a slowing down in industrial and other market segments too. Europe’s economic crisis leaned on the PC market and China, too, was not spending as much as had been hoped. IDC notes the “lackluster” Windows 8 launch did not prove to be the boon for PC sales manufacturers were praying for.

Cheaper Chinese suppliers pressured average selling prices and dragged down overall revenues.

Just 17 companies with revenues of a billion or more, of the 120 that IDC tracks, managed growth of over five percent for 2012. Most saw declining revenues, including the majority in the top ten. Qualcomm, Broadcom, NXP, Nvidia, MediaTek, Apple and Sharp were the few in the 25 largest companies that registered positive growth.

Intel, IDC points out, saw revenues plunge $50 billion for the year, a drop of three percent, attributed mainly to weak PC demand and failing to make significant inroads into the tablet and smartphones market. Samsung saw revenues fall six percent. Texas Instruments , at number four, saw a decline of six percent.

Qualcomm, however, was a winner – ranking third in 2012 and growing revenues 34 percent to reach $13.2 billion. IDC states that this is largely due to Snapdragon and its prevalance in modem technology.

Altogether, the top ten vendors – including Broadcom, Renesas, Hynix, STMicro and Micron, held 52 percent of global semiconductor revenues, seeing a three percent decline compared to the previous year. The top 25 companies overall declined three percent, bringing in revenue of $206 billion.

Semiconductor device types were a mixed bag. Fastest growing were sensors and actuators, but these made up just two percent of overall revenues. ASSPs represented 32 percent of overall revenues and grow four percent thanks to media, graphics, and application processors, as well as RF and mixed signal ASSPs. Optoelectronics made up six percent of the revenues, growing five person on the back of image sensors and LEDs. Microcomponents declined five percent, while memory declined ten percent, holding 17 percent of all industry revenues. Analogue declined by seven percent to account for seven percent of all revenues.

IDC’s semiconductors research manager Michael J Palma said in a statement that the challenge is to “zero in on their key value propositions”.

“Whether that is in modem or connectivity technologies, sensors, mixed-signal processing or power management, there are areas of the market showing strong potential,” Palma said. “However, competing in crowded segments with little differentiation has contributed to the slowdown in semiconductor revenues”.

LTE smartphone shipments surge 1100% in Q4 2012

LTE-logoThe smartphone market is slowly maturing and overall handset sales, including feature phones, remained flat in the fourth quarter of 2012. However, sales of LTE enabled devices skyrocketed in developed markets.

According to Strategy Analytics, shipments of 4G smartphones grew by 1100 per cent in Q4 2012.

The surge was led by Apple and Samsung, while at the same time shipments of 3G phones slowed. The trend coincides with an aggressive carrier push in Europe, including the UK.

Just a year ago, LTE connectivity was reserved for high end smartphones, but the mobile landscape is changing and even cheaper SoCs now offer integrated LTE. Qualcomm leads the way with last year’s Krait-based Snapdragon S4 chips, along with new “century series” Snapdragons coming on line right now. Apple already has LTE in current generation products, although older 4-series iPhones lack LTE support. By the end of the year Nvidia will introduce the Tegra 4i, its first SoC with integrated LTE, and Intel also plans to deliver LTE in its next generation mobile chips, coming in early 2014.

In terms of volume, smartphones are expected to overtake feature phones this year, which means plenty of mid-range LTE smartphones will find their way to consumers’ pockets. Although LTE is expected to be the fastest growing WWAN technology in history, it is still off to a slow start in many markets, including Britain. According to its last earnings report, Everything Everywhere didn’t add many 4G users since it launched its 4GEE network. However, things are picking up and other carriers will enter the market later this year, although Ofcom failed to raise plenty of cash on its 4G spectrum auction.

Nexus 4 shipments estimated at just one million units

nexus4-ceGoogle’s Nexus 4 has been on sale for three months, although one could argue that it has been on sale for a couple of weeks, since it wasn’t really available anywhere. For some reason, Google grossly underestimated demand for its latest vanilla Android phone, resulting in ridiculous shortages in every single market.

Android enthusiasts managed to work out that Google shipped just a million units in the first three months of sales, after four months in production.

Qualcomm raises 2013 outlook

snap dragon Qualcomm has posted  strong quarterly results for the beginning of 2013, which have led to the company raising its revenue and earnings predictions for the upcoming year.

The chip company said saw its net income grow by 36 percent for the first quarter fiscal 2013,  hitting $1.91 billion, while revenues totalled $6.02 billion, up 29 percent year-over-year.

Qualcomm chief exec Paul Jacobs put the results down to a “growing global demand for smartphones” and the company’s portfolio of 3G and 4G LTE processors.

He added that the company’s broad licensing partnerships and “extensive chipset roadmap”, including its new Qualcomm Snapdragon 800 and 600 processors, had also attributed to the growth.

Revenue from licensing fees grew by 20 percent to $1.82 billion, while equipment and services sales rose by 33 percent, generating the company $4.2 billion.

As a result of the stronger than anticipated results, the company said that it is adjusting its full year outlook from a previous revenue prediction of $23.4 billion to $24.4 billion.

Qualcomm also made some announcements regarding its senior level staff.

In a separate statement Qualcomm said that it would be saying goodbye to CFO William Keitel, who it retiring after 11 years at the post.

Keitel, who will step down on 11 March, will be replaced with George S. Davis, who is currently executive vice president and chief financial officer of Applied Materials.

Fixing Nexus supply problems is Google’s new priority

nexus4-ceThe botched Nexus 4 launch has already turned into a rather embarrassing episode for Google, but Larry Page is trying to reassure investors and analysts, although it could be too little, too late.

Page mentioned the problems during Google’s Q4 earnings report, but he did not say much and he did not provide any new details.