Intel strikes out towards radio communication dominance
Published: Tuesday 10 October, 2006
First Thoughts: About 233 million PCs leave the factories in the course of a year, most of them with entire motherboards built by Intel, and an increasing number of these include Centrino wi-fi devices. This compares with say 280 million or so devices shipped by the number one handset maker Nokia, each year.
So far those Nokia handsets each have around 5 separate radios in them, radios for the various bands of 3G and GSM, Bluetooth radios and more recently additional wi-fi radios.
For Intel there have just been Centrino radios in their boxes, far simpler devices which it could afford to make itself. The Intel shift into wi-fi, a technology that has never been happy with any business model it has attempted, still drew huge market share to itself and changed the shape of Wi-Fi technology everywhere.
Now that Intel wants to up the ante, and put dual mode Wi-Fi/WiMAX chips into its motherboards, plus chips that can talk to high speed cellular data access using HSDPA, the same transitions may happen once more. Intel will have wi-fi N, WiMAX and HSDPA on laptops next year
If that same pattern emerges in the next generation of Intel inspired devices, Intel will at first buy chips in, then design its own, and then, after delays, ramp volumes to make it the market leader in radio and tuner chip provisioning. Centrino chips were never the best, but Intel used them anyway because it made them, so effectively Intel is leveraging its PC dominance.
Nokia buys most of its radios in, with Texas Instruments responsible for around 50% of the supply, along with the applications processor and an entire UMTS architecture and the same is true for other handset makers.
We are entering a world where radios, and tuners chips are going to be everywhere. Every laptop, handset, MP3 player, handheld DVD player, watch, PDA, will have multiple radio communications. Like the Centrino, the availability will never be discussed. You buy a device, it communicates. Customers will not care, or even think about how, in the same way that consumers never thought about how TV programs reached TVs.
The market for these devices will be going up rapidly. So at first it won’t be noticed how much market share Intel steals from traditional communications chip makers, because they will all be doing well. And once a PC gets down to the size of a palm sized device, what difference will there be between a handset and a PC?
Final Thoughts: The onslaught of new digital entertainment services, stimulated by the global move from analog to digital TV, will throw up huge swathes of multimedia capable spectrum. And the proliferation of services offered over this spectrum will be like an avalanche compared to what has come before. Driving even greater need for radio connected devices.
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