Fred,
More information regarding the upgrading potential in the cell phone arena. Interesting Reading. I am betting on the TXN approach vs Intel, however, it could be a battle.
dallasnews.com
Saturday | April 28, 2001
Renewed rivalry
Intel, Texas Instruments are each betting their chip will power the superphone of the future
04/29/2001
By Leah Beth Ward / The Dallas Morning News
SANTA CLARA, Calif. – Texas Instruments Inc. may be the king of chips for cellular phones, but rival Intel Corp. thinks it has the Dallas company's number.
The only company that's managed to brand a piece of silicon – "Intel Inside" – is putting its considerable muscle behind chips that will deliver the Internet to the next-generation device of your choice.
Intel Corp.
Headquarters: Santa Clara, Calif.
Chief executive officer: Craig R. Barrett
2000 net income: $10.535 billion
Fans say: Born to dominate
Foes say: PC was yesterday
Legendary figure: Robert Noyce
The chips are digital signal processors and analog processors. Over the past four years, the special "real-time" properties of this silicon duo made mobile phones ubiquitous and propelled Dallas-based TI to the top of the market.
But with characteristic confidence – some would say arrogance – Intel is challenging TI's dominance.
"The incumbent [TI] has no advantage," Ronald Smith, senior vice president of Intel's wireless communications and computing group, declared in a recent interview at the company's headquarters.
Beyond the braggadocio, it can be tough to compare the companies' chipmaking chops.
But the contest is coming as communications technology advances.
Both chip giants are firing up their marketing machines to announce "design wins," a way of keeping score of whose chip has won the latest nod from an important equipment maker or software developer.
If projections for the wireless market are even close to some estimates, 1 billion hybridized phone/personal digital assistants will be shipped in 2004, possibly earlier. With a current market share of 60 percent, TI is pedaling fast to keep its lead.
"It's TI's game to lose," said Will Strauss, president of Forward Concepts Inc., a Tempe, Ariz., semiconductor research firm.
Neither company is girding for the new market without a nod to the past. Indeed, there may be some historical scores to settle in this round.
TI once dominated Intel's business: chips for personal computers. In 1980, TI ranked first in total sales of microchips, according to Dataquest, part of the Gartner Group research firm. Ten years later, TI had fallen to seventh place. Intel was first.
But Intel has been caught napping before, too.
Dramatic plan
In July 1996, Intel chairman Andy Grove and Microsoft's Bill Gates shared the cover of Fortune magazine. In the story, the two brainstormed about the future of computing. Both stuck by the PC as the center of the universe.
Meanwhile, TI was quietly executing a dramatic plan to dominate a new era: wireless communications.
Texas Instruments Inc.
Headquarters: Dallas
Chief executive officer: Tom Engibous
2000 net income: $3.1 billion
Fans say: Proven market leader
Foes say: Stuck on phones
Legendary figure: Jack Kilby
Even today, Mr. Strauss said, the two companies still carry some of their old baggage. "Intel generally trivializes the DSP and its role in wireless," he said, "and TI doesn't entirely understand the PC industry."
What about a phone that has some of the functions of a PC? That's what many are predicting consumers will want when they exchange their cell phones for next-generation units that can download video clips and carry data at faster rates.
When demand takes off, who will have the most chips to sell?
"Only a few chipmakers can ship in volumes approaching those numbers," Mr. Strauss said. "And with its planned new factories, Intel aims to be one of them. A very big one."
Intel knows "big."
In the first-floor visitors' lobby of the Robert Noyce Building, Intel's long, historical shadow is apparent.
This is the company that coined Moore's law, co-founder Gordon Moore's maxim that processing power doubles roughly every 18 months, leading consumers to expect a nonstop stream of faster, better and cheaper high-technology products.
Intel can also claim the late Robert Noyce, who is generally credited with inventing the integrated circuit around the same time as TI's Nobel Prize winner Jack Kilby. And Mr. Grove's own law – "Only the paranoid survive" – has come to stand as a memorable mantra for the age of technology.
The Intel corporate culture is famously competitive and disciplined. Mr. Grove keeps it that way. He required, for example, that his successor as CEO, Craig R. Barrett, keep a cubicle on the fifth floor that's no bigger than anyone else's.
It's no secret that Mr. Barrett prefers to operate from Phoenix, but employees say he's in the office more often these days. Indeed, the tall, distinguished-looking executive stood relatively unnoticed in the lunch line one recent spring day, paid for his food and walked five flights back up to his cubicle.
Intel seems to have lost none of the chutzpah that made it the world's largest chip company despite a brutal downturn that has left no one in the industry unscathed.
While other chip companies cut capital spending and research budgets, Intel has declared that it will "spend" its way out of the downturn.
Analysts say Intel's foray into DSPs – with a big assist from Analog Devices Inc., a competitor of TI's – is an obvious, if belated, acknowledgement that wireless devices, not personal computers, are center stage these days.
But Intel cedes nothing.
DSPs? Please!
Intel's strategy is to use DSPs from Analog Devices and attach them to Xscale, a low-power, high-performance chip. The company unveiled Xscale in August as the heart of an engine for the mobile Internet. "Xscale puts us in the lower-power, high-performance arena," said Mr. Smith, the executive plotting Intel's wireless move.
Mr. Smith calls Intel's strategy "a paradigm shift" in the wireless world because it emphasizes the computing and memory capacity of a regular processor over the DSP, which excels at communications. "We're at an obvious advantage," he says.
He waves away a central role for DSPs: "They are only a piece of our wireless strategy."
Analysts say that Intel is in effect telling software developers to write applications for its Xscale and not worry about writing code for DSPs, which requires advanced mathematical and engineering skills.
"Most programmers have no idea what a DSP is," said Mr. Strauss. "Intel has told programmers, 'Don't worry about this weird DSP stuff. We'll take care of it. Go play with Xscale.'"
Remember the basics
In waving away the importance of the DSP, Intel's and TI's technology and strategic differences come into sharp relief.
Tom Engibous, TI's chairman and chief executive, said in an interview that the two companies have "very different ideas about what the mobile Internet will be. It's a religious separation," he said.
Mr. Engibous said applications for next-generation devices will be more communications than data centric. Video conferencing, for example, will run off of a DSP more efficiently than an Intel chip, he said.
And he scoffs at the idea of data-intensive computing on hand-held devices. "How many people are really going to do a spreadsheet on a cell phone screen?"
Alain Mutricy, a general manager in TI's wireless business unit, said Intel is putting out the equivalent of propaganda. "They are just trying to confuse people," he said.
Programmers writing for TI and the next generation of mobile devices don't have to worry about DSPs unless they want to, Mr. Mutricy said. TI has a stable of 50,000 software engineers who have written the code on existing DSPs for mobile phones and are ready to do so for the next generation of phones.
What is more, TI says, writing code for the new devices must support, or be compatible with, existing DSP software.
"If you're developing software for a new DSP, you have to start from scratch," said Jeff Wender, a spokesman for TI's wireless unit. "Who wants to do that?"
TI unveiled its next-generation product last fall and is already shipping samples. Intel's product is still in development.
"Intel doesn't have a strong presence yet," said Shafath Syed, director of product marketing at Beatnik Inc., a Menlo Park, Calif., audio software company.
Craig Mathias, an affiliate analyst with Mobile Insights, said the TI vs. Intel battle will be decided by equipment makers such as Sony Corp. or Nokia Oyj, and software developers.
TI got a big name when Microsoft – long inseparable from Intel – chose its product to develop a smart phone code-named "Stinger," though the endorsement isn't exclusive. Nokia, Ericsson and Sony have also said they like TI's technology.
Last week Intel fired back, announcing about 50 endorsements from equipment makers and software houses.
In the end, Mr. Mathias said, the chips will fall where the customers want them.
"It's all about what products those chips end up in," he said. |
