Tony - Re: "what is the perception of Intel out there in the marketplace re comm products?"
Intel earns respect in communications
By Darrell Dunn, EBN
Mar 1, 2002 (12:19 PM)
URL: ebnews.com
Intel Corp. is using its XScale processor architecture as a battering ram to knock down critics of its much-analyzed foray into communications ICs.
Though hard evidence in the form of full-scale production and customer adoption rates may be lacking, Intel nevertheless is changing the perception of many in the industry. Once viewed as a PC processor maker that used its leading position as a flash memory supplier to dabble in communications, the company's track record over the past two years is helping it to redefine itself.
“I've been pretty impressed the last year or so that Intel does seem to be getting its ducks in line and is making good inroads into the areas of networking and handsets,” said Tom Starnes, an Austin, Texas-based analyst at Gartner Dataquest, in an interview here at the Intel Developer Forum. “This is no small company. It's absolutely one of the best companies in the world for putting things into silicon.”
Intel is also proving adept at building a coalition that can help it exert its influence on new markets.
Intel and Microsoft Corp., for instance, have already extended their partnership into handheld computing, conjuring up parallels to the 'Wintel' team that defined the PC era. The companies this week agreed to optimize the Windows CE.NET operating system to run XScale instructions. The deal closely follows a pact disclosed at last month's 3GSM World Congress under which the two will develop cell phone reference designs based on Intel's wireless platform and Microsoft software.
In the past few weeks, Intel has introduced six devices based on the X-Scale architecture, including four at IDF, that target an array of communications end-equipment markets. Those include XScale devices for PDAs and smartphones, three aimed at network applications, and an X-Scale-based I/O processor.
Downturn a blessing in disguise?
Intel created its Communications Group last April under the direction of executive vice president Sean Maloney, who serves as general manager of the business, based in Santa Clara, Calif.
Maloney told EBN this week that the semiconductor downturn of 2001 -- the first significant downturn in the history of the communications ICs market -- may inadvertently have helped Intel's fledgling effort by letting it bring out new products at a time when demand pressures were abating.
“[Communications OEMs] went from a mind-set of build, expand, and grow to one of showing profitability,” he said. “The communications IC industry for the past five years has been typified by a lot of blown delivery schedules, ... [while] we have quietly executed.
“The [OEM] now wants its supplier to show continuous cost reductions every quarter. That is semiconductor economics, and that, we feel, is our home ground,” Maloney said.
By having one processor architecture that it can apply to a wide spectrum of applications, Intel can take advantage of R&D and technology improvements across its portfolio while reusing its various library elements and common toolsets. The company has also kept its capital expenditures at levels much higher than other communications IC companies and is one of just a few in the industry bringing up production on 300mm wafers, Maloney said.
Getting a handle on handsets
Intel's presence in the cellular handset sector remains limited, although handsets based on the XScale platform are expected to hit the market by midyear. In handheld computing, however, Intel's success last year with Compaq Computer Corp.'s IPAQ PDA and related PocketPC-based handhelds allowed the company to capture about 20% of total PDA revenue from virtually nothing in 2000.
Possible gel factor
The company's deepening relationship with Microsoft will not only lead to further market share gains but will help gel the entire handheld computing market, according to Peter Green, general manager of Intel's Handheld Computing Division in Chandler, Ariz.
“This whole industry that is emerging is look-ing for leadership,” Green said. “We think we have two leaders here that can provide that ... and shape the industry. We've proven we can do that. We've done it independently, and we've done it together for 20 years.”
Whether Intel and Microsoft become as clubby in these non-PC markets remains open to speculation, according to analysts, who note that when it comes to wireless handsets, Intel must first reckon with the imposing presence of Texas Instruments Inc.
“It would be foolish for Microsoft not to pay as much attention to Texas Instruments as they do Intel,” Dataquest's Starnes said. “TI ain't going nowhere and will remain strong in the cell phone business.
“There is a question now as to who will win in the handheld PC space, but there are nearly a half-billion cell phones sold every year and only a few million PDAs. Microsoft can't ignore the guy that has the guaranteed volume,” he said.
Jay Srage, TI's OMAP marketing manager for strategic partnerships, said the company has agreements with Microsoft regarding both the WinCE.NET and Smartphone2002 operating systems. Srage also expects that agreements TI struck in the past few months with Palm Inc. and Hewlett-Packard Co. should allow it to expand its DSP business from cellular into PDAs.
“TI has been dominating the wireless business since it first started in the mid-'90s, so Microsoft has a very strong reason to work with TI, and we feel the same way about working with Microsoft,” he said.
Good report card, but...
Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz., said Intel rates a B+ for its efforts in the communications market over the past 18 months, particularly consider-ing that the company has had to make some significant changes to its corporate mind-set.
“Their strategies have worked well in the past in the PC market, but whether they work well in cellular is really yet to be seen,” Strauss said. “They didn't understand the nuances of the market, but they have enough money and enough people within Intel who are educated about communications and are leading the move away from a PC-centric way of life.”
Ron Smith, general manager of Intel's Wireless Communications and Computing Group, said the company's progress “has exceeded expectations of two years ago.”
“At that time, we were just completing our acquisition of DSP Communications,” Smith said. “We were still developing a new DSP core [with Analog Devices Inc.], and we were still positioning the StrongArm processor [obtained through the acquisition of Digital Equipment Corp.'s chip business] and bringing that in-house.
“I think we're right on schedule,” Smith said. “All this Wintel stuff makes for great headlines, but the reality is we've got to compete. We've got to offer solutions that add value. Wireless is moving into the data world, and that's an area where we have a lot of expertise and a lot of capabilities we can bring into that space. We're making progress every year.” |
