FWIW - Probably not much
Forbes/Andrew Seybold's Wireless Outlook Announces Investment Opinion on Intel Intel Aiming for a Home Run in Wireless
May Not Reach First Base, Andrew Seybold Opines In Forbes/Andrew Seybold's Wireless Outlook
NEW YORK and LOS GATOS, Calif., Jul 2, 2001 (BUSINESS WIRE) -- The XScale processor recently touted by Intel Corporation as the answer to smaller, faster and cheaper wireless phones is neither breakthrough technology nor does it represent a significant threat to existing chipmakers serving the wireless data/wireless Internet industry, states Andrew M. Seybold in the current issue of Forbes/Andrew Seybold's Wireless Outlook, a monthly newsletter focusing on the wireless data/wireless Internet field.
Other companies are also working with "system-on-a-chip" products, in which a processor core, digital signal processor (DSP) and memory are combined on a single chip. But there are more serious issues, Seybold says.
"Wireless handset vendors don't want their product life cycles to be controlled by Intel as PC life cycles are ... the product life cycle for most PCs is less that six months," he writes. "I don't think phone vendors can afford to play this short-production-cycle game. Margins are low, so it is critical to keep products alive for at least nine months to a year."
Moreover, he writes, Qualcomm's chip group has the technology that will be used in 3G networks and the company's policy is to license production to other manufacturers, giving phone-makers the luxury of multiple component sources. Seybold cites other chip technology companies that share Qualcomm's licensing philosophy, among them ARM, Ltd, which licenses its core processor to " ... a who's who of the wireless world," and which dominates the technology but not the market.
A single chip strategy in phone design can be risky, he adds, noting that with redundancy, there is less chance that your phone will crash while you are talking - a possibility if there is just one chip handling both voice and data functions.
"ARM will continue to be the processor of choice for wireless," he says. "This may be a situation where Intel will find itself on the outside, rather than Intel Inside. Unlike the PC world, wireless is not a marketplace where a single company can dominate."
In a second article, Seybold examines the optimism he shared with others in the wireless field, analyzing key factors in the current situation and examples of probable survivors, concluding that the industry's rebound generally will be substantial. In other cases, citing prominent examples, long-term survival is highly questionable, he says.
Recent FCC activities potentially damaging to wireless companies also come under Seybold's scrutiny, notably the sale of repossessed wireless spectrum. Court cases are pending, he notes, and meanwhile, at least one major company has been left vulnerable to takeover, or worse.
Associate Editor Barney Dewey reports on significant recent events affecting the fortunes of companies in the newsletter portfolio, currently comprised of 17 wireless-related enterprises. In his "Companies to Watch," column, he profiles a San Diego wireless service provider, and a start-up mobile device manufacturer based in Santa Clara.
ABOUT FORBES/ANDREW SEYBOLD'S WIRELESS OUTLOOK
Forbes/Andrew Seybold's Wireless Outlook, a monthly investment advisory newsletter focused on publicly traded wireless technology companies, is published jointly by Forbes and Andrew Seybold's Outlook, Inc., a newsletter and conference producer based in Los Gatos, Calif. Wireless Outlook is not a market-timing device, but rather is an information conduit based on belief that the wireless technology field offers significant opportunities for investors. Newsletter staff members believe that the stocks comprising the portfolio are appropriate for any well-diversified wireless portfolio. For subscription information, call 800/293-3157. For editorial information, email amseybold@outlook4mobility.com. For further information contact Ruth Johnson at 408/354-7900 or email ruth@outlook4mobility.com.
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Forbes/Andrew Seybold's Wireless Outlook
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