Forgive me if this has already been alluded to:
techweb.com
Intel Backs Away From CDMA Chip Market
(08/25/00, 5:33 p.m. ET) By Mark LaPedus, Semiconductor Business
News
In a setback for its fledging cell phone
semiconductor business, Intel is quietly backing
away from the CDMA chip set market as part of
a plan to focus on new and more promising
wireless IC segments, SBN has learned.
The Santa Clara, Calif.-based company entered
the IS-95-compliant chipset market for CDMA
handsets only eight months ago after agreeing
to acquire cell-phone IC specialist DSP
Communications Inc. for $1.6 billion. But Intel
Corp. (stock: INTC) had little luck in garnering
design wins in CDMA, due in part to stiff
competition from the leading supplier of chip
sets in this booming business -- Qualcomm Inc.
(stock: QCOM), San Diego, analysts said.
Instead of CDMA, Intel will focus more on
developing and selling cell phone chipsets for
other digital cellular standards,such as TDMA,
PDC, and third-generation (3G) wireless,
according to Ronald Smith, vice president and
general manager of Intel's Wireless
Communications and Computing Group.
"We are not focusing on the CDMA market,"
Smith said in an interview at the Intel Developer
Forum in San Jose, Calif., this week. "We're still
selling the PDC chip set. We announced a TDMA
chip set. We are also interested in wideband
CDMA [W-CDMA], but [IS-95-compatible] CDMA
is more of a proprietary market."
Smith's comments were made in reference to
Qualcomm's dominant position in the CDMA chip
set market. Though Qualcomm has licensed its
CDMA chip technology to several IC vendors --
including Intel, LSI Logic Corp. (stock: LSI),
Philips Electronics NV (stock: PHG), and
PrairieComm -- the company had an 89 percent
share in the worldwide IS-95-compliant,
CDMA-based chip set market in 1999, according
to Hambrecht & Quist LLC of San Francisco.
When Intel acquired DSP Communications last
October, however, it hoped to give Qualcomm a
run for its money in CDMA. At that time, Intel
was expected to leverage its vast resources
and fab capacity to grab significant market
share away from a much smaller entity in
Qualcomm.
Competitors believed Intel was never a factor.
"Intel had a few design wins, but I never saw
them in the market," said Johan Lodenius,
senior vice president of marketing and product
management at Qualcomm's CDMA Technologies
Division, the chip and software arm of the
company.
Now, Intel is looking for new and better
opportunities in the cell phone IC market, such
as non-CDMA chip set lines, RISC-based
controllers, flash memories, and other devices,
according to Smith.
"The [cell phone] market is very robust," Smith
said. "The demand for our flash memories and
other products is also very robust."
Smith added that Intel is more bullish on a
next-generation CDMA standard called W-CDMA,
which is being endorsed by Motorola Inc.
(stock: MOT), Nokia AB (stock: NOK), NTT Corp.
(stock: NTT), and other large OEMs and
carriers. In theory, 3G enables cell-phone
products to obtain wireless data at speeds up
to 2 Mbits.
3G is expected to be deployed in Japan in
2001, followed by Europe and the United
States. With Japan looking to take the lead in
3G, Intel wasted no time in finding a partner in
that nation. Last May, in fact, Intel and
Mitsubishi Electric Corp. announced a deal to
co-develop a chip set for 3G-enabled cell
phones.
The company also has high hopes for a new line
of chips for cell phones, PDAs, and other
products. Introduced this week at the Intel
Developer Forum, the company's new XScale
product is a new architecture designed for
low-power, handheld equipment.
Intel is also co-developing a promising line of
DSPs with Analog Devices Inc. (stock: ADI),
which will be a key part of the company's
cell-phone chip strategy, Smith said.
"[The DSP] is on schedule," Smith said. "We
expect to disclose the details later this year."
Analysts believe the DSP from the Intel/ADI duo
will be not be shipped until the end of this year.
"My guess is that Intel won't disclose anything
about the DSP until November," said analyst Will
Strauss of Forward Concepts Co., Tempe, Ariz. |
