Analysis In the week that the microprocessor turns 40, its inventor Intel is besieged by ARM-based rivals in the biggest growth market for the chips: mobile devices.
Intel's highest hopes rest in the mobile processor's move beyond the cellphone, into larger, more PC-like products that fit more comfortably into Intel's ecosystem. But it will have a tough battle on its hands. The leader of the mobile ARM pack, Qualcomm, used to say it wanted to stick to what it knew best, smartphones, but it reversed that strategy when it unveiled the Snapdragon chip, targeting it at a huge range of consumer and 'post-PC' devices, and when it acquired Atheros, with a beady eye on the home wireless market.
Now Qualcomm is eyeing Intel's traditional place as the primary partner for Windows, using its early moves into next year's Windows 8 as a springboard into Intel's heartlands – and this time, it has Nokia on its side too.
Qualcomm is an expert at forging a wide mesh of alliances around its efforts, working with carriers, developers and consumers as well as its direct customers. One of its most important partnerships in recent years has been with Microsoft, in whose unloved Windows Mobile platform the US chipmaker has invested far more time and effort than it would seem to merit (the new iteration, Windows Phone 7, had only 1.5 per cent share of the smartphone base in the third quarter, according to Gartner).
But Qualcomm can afford to play a long game, and it has its own challenges - just as it aims to take on Intel in mobile computers (whatever they may look like in future), so it is being squeezed on one side by low cost challengers for its cellphone crown, such as MediaTek, and on the other by immigrants from the PC market like Nvidia. So usurping Intel's traditional place at Microsoft's right hand is a strategic imperative for Qualcomm, and even if that does not bear much fruit in WP7, it is likely to reap rewards in the far more important Windows 8, which spans ARM and x86 architectures, and various device formats.
The possible obstacle in Qualcomm's path, after years of wooing Microsoft, was the sudden anointing of Nokia as the lead WP7 partner. Despite settling their legal differences in 2008 and even signing a supplier deal in 2009, the two firms had a long history of hostility and Nokia had its own well established alliances in the chip market, with Texas Instruments, ST-Ericsson (STE) and more recently Broadcom.
In addition, Nokia had got close to Intel, via the aborted MeeGo effort and because it buys chips for low-end phones from the firm's Infineon Wireless unit. This was where Qualcomm's intensive cultivation of Microsoft really paid off – at the point where Nokia was launching its first WP7 devices, the make-or-break Lumia family, no other silicon vendor had a platform optimized for the new OS and ready for market.
Nokia insists it will include STE in its Lumia range as soon as possible, but it knows that Qualcomm brings significant advantages in its deep understanding of the Microsoft platforms, and will be basically unavoidable in WP7 for years to come – a position it looks set to extend into Windows 8.
Gloating over its close relationship
So as Qualcomm gloated over the "close relationship" and "multiple device plans" it had with its new, if reluctant, best friend, the two firms are already reported to be gearing up to launch one of the first Windows 8 tablets, as early as the second quarter next year.
Qualcomm urgently wants to make Nokia dependent upon its Snapdragon processors, and permanently win a major OEM customer from which it has always been excluded, so Enrico Salvatori, president of Qualcomm CDMA Technologies in Europe, was keen to stress in a recent interview that the Lumia collaboration went beyond the usual supplier relationship.
Instead, the US firm had significant input into the smartphone design, he said, adding: "We are working on a roadmap [with Nokia] and not a single device, a single launch. It's an important collaboration for Qualcomm, so we are very excited about working together. It's been very effective in terms of time to market because we developed the phone together. It's been a very successful development."
If Nokia is planning to be first off the blocks with an ARM/Windows 8 tablet, it will certainly need Qualcomm's help. The San Diego giant was loud in its support of the new OS at its launch and back in March, Rob Chandhok, president of Qualcomm Internet Services, said the firm was preparing tools and software to make Snapdragon attractive to the huge Windows developer community, and not just the programmers focused on smartphones.
Nokia must make a splash in 2012
These efforts will almost certainly feed into Nokia's tablet plans. Prevented by Microsoft's bar on large-screen WP7 devices from entering this space in 2011, the Finnish firm will need to make a splash next year. Its French chief, Paul Amsellem, said in a newspaper interview that the company will launch the product by June 2012, though official spokespeople stressed that there had been no formal announcement.
Last month, at the Nokia World event where Lumia was unveiled, CEO Stephen Elop (and former Microsoft man) commented: "From an ecosystem perspective, there are benefits and synergies that exist between Windows and Windows Phone. We see that opportunity. We'll certainly consider those opportunities going forward."
An early W8 tablet launch would be a critical moment for both partners and for Microsoft. If successful, it would take Qualcomm into a segment of the tablet market which it could almost certainly have to itself for many months (apart from Intel x86 models), offsetting the mounting pressure it feels in Android tablets from Nvidia and Texas Instruments, in particular.
It would give Nokia, for the first time in years, a frontrunner position in a new sector, the Windows/ARM slate, and an operating system which promises to be hugely impactful – a big improvement on ageing Symbian and neglected WP7. Of course, for Microsoft, it would mark a belated move – perhaps disastrously belated – into touchbased tablets, and the hope that the attractions of W8 would succeed in stealing iPad or Kindle Fire upgraders, while appealing to a broader base too.
Meanwhile, tablets are certainly not the only new target market for Snapdragon. This week, Qualcomm broadened the Snapdragon range and had its eye on Nvidia's favorite market with the release of GamePack, a set of features and apps for the gaming sector, all optimized for Snapdragon. And by combining the processor and its Atheros products in future, it could look at pushing into smart TVs and other consumer home gear.
The new models in the Snapdragon S4 range (the high end of the family) aim to lower design, engineering and inventory costs for a broad variety of devices including tablets, said Qualcomm, while supporting feature sets for multimedia, connectivity, camera, display, security, power management, browsing and natural user interface design. The products include the new Krait CPU, integrated with various combinations of modems supporting EV-DO, HSPA+, TDSCDMA, TD-LTE, FD-LTE and Wi-Fi. Devices based on Snapdragon S4 processors are expected to appear in early 2012.
Craig Barratt, previously CEO of Atheros, sees a role for Snapdragon in the home connectivity markets his unit targets, as connected home and media platforms increasingly require intelligence and processing power in the end points as well as wireless links. "We're going to drive technology to more media devices in the home," he said in an interview with CNet.
In future, Qualcomm will be able to tailor processors for specific devices in the home, he said, particularly tapping into the expected rise in the processing power of the television. Much of the technology needed to work in a TV is already available in Snapdragon, he said, and as in handsets, connectivity and CPUs will increasingly be integrated together.
Copyright © 2011, Faultline
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