Home » Mobile Internet » STMicroelectronics and Texas Intruments are exiting the mobile market as there is no chance to compete with aggressive SoC vendors from PRC and the market #2 MediaTek from Taiwan

STMicroelectronics and Texas Intruments are exiting the mobile market as there is no chance to compete with aggressive SoC vendors from PRC and the market #2 MediaTek from Taiwan

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Core information:

STMicroelectronics sees no future for itself in ST-Ericsson’s strategy of Fundamental repositioning for modem, APE and ModAps spaces as it announces new strategic plan [Dec 10, 2012]

“Today we are announcing the new ST, aligned with the new market environment,” said Carlo Bozotti, President and CEO of ST. “Based on that, we have made the decision to exit ST-Ericsson after a transition period. We will continue to support ST-Ericsson as their supply-chain partner, advanced process-technology partner and application-processor IP provider.” 

“Our new strategy is centered on leadership in sense and power and automotive products, and in embedded-processing solutions,” continued Bozotti. “Our specific focus is on five product areas: MEMS and sensors, smart power, automotive products, microcontrollers, and application processors including digital consumer. 

In Embedded Processing Solutions the company will focus on the core of the electronics systems rather than on wireless broadband access. The Embedded Processing Solutions segment includes microcontrollers, imaging products, digital consumer products, application processors and digital ASICs. 

As a consequence of the major changes that occurred in the dynamics of the wireless market, ST has taken the decision to exit ST-Ericsson after a transition period and is currently in negotiations on exit options. This disengagement process has started, with the transition expected to end during the third quarter of 2013. While no further details can be provided at this time, any option taken will be in line with the new financial model as presented by ST today.

Ericsson, ST’s partner in joint venture, meanwhile reinforced its commitment to the modem part of the business with Ericsson starts negotiations on ownership of ST-Ericsson [Dec 10, 2012]

ST-Ericsson announced its strategic plan in April 2012 and is in the middle of executing on company transformation aiming at lowering its break-even point and introducing new technologies.

Ericsson continues to believe that the modem technology, which it originally contributed to the Joint Venture, has a strategic value for the wireless industry. For Ericsson, a key priority in this process is a successful market introduction of the new LTE modems that it is certain will be very competitive and needed in the market.

During the process Ericsson will not speculate on the possible outcomes, timelines, and future ownership structures of ST-Ericsson.

This led to ST-ERICSSON CONFIRMS STRATEGIC DIRECTION [Dec 10, 2012]

ST-Ericsson confirmed today its strategic direction announced in April and continuing industrial and technology relationships with STMicroelectronics and Ericsson, following ST’s decision to disengage from ST-Ericsson after a transition period.

“ST-Ericsson set a new strategic direction in April this year to develop competitive system solutions either directly or with partners. We have been executing steadily and aggressively on our strategy and delivered on our commitments,“ said Didier Lamouche, President and CEO of ST-Ericsson. “We have started to deliver integrated ModAp platforms to our lead customers and testing in-the-field of our cutting-edge LTE modem, as well as introducing a disruptive technology for the mobile market as we committed earlier this year.”

ST-Ericsson continues its cooperation with Ericsson in the field of advanced wireless telecommunications to bring innovative and competitive modem solutions to the market.

ST-Ericsson has started to work with customers and operators on testing its innovative LTE modem which is the core of its next NovaThor and Thor platforms. This follows extensive interoperability testing with Ericsson’s advanced network infrastructure as well as other network vendors.

ST-Ericsson continues its cooperation with ST as its supply chain partner, advanced process technology partner and application processor IP provider.

A NovaThor single chip modem and application processor based on ST’s advanced process technology has been sampled and confirms the breakthrough nature of the technology in terms of performance boost and ultra-low power consumption. Results of this cooperation will be demonstrated next month, with ST-Ericsson’s next generation NovaThor ModAp, at the upcoming Consumer Electronics Show in Las Vegas.

ST-Ericsson will continue to work on delivery on its next generation technology and continuity in execution on customer commitments and supply.


OMAP line being discontinued. What does this mean for the DM8148 family? [Answer from OMAP Embedded/EEE Marketing Manager on TI E2E Community, Nov 20, 2012]

First let me clarify the OMAP product line is not being discontinued. We are changing the business strategy with OMAP moving away from smartphone/tablet/mobile market and focussing primarily on Embedded (including Automotive). This is consistent with communications earlier the quarter refer here [2012 Embedded Processing & Wireless investor meeting, Sept 25, 2012], In addition the announced actions [see below] to reduce costs is a implementation of the previously announced strategy to enable us to focus investment and resources and serve the embedded & automotive markets. In addition, consistent with our announced startegy to focus on embedded we announced at Electronica [see below next] with several module partners – OMAP 5 System on modules to enable embedded designs around OMAP.  OMAP processors will continue to ship and be supported for customer for years to come and will evolve around the strategy to focus on embedded & automotive.

Texas Instruments will pull back its wireless business and retreat from smartphones and tablets, refocuses on embedded processing [The Dallas Morning News, Sept 25, 2012]

A top Texas Instruments executive today said the company is pulling back its wireless business to refocus on new embedded processing products.

Greg Delagi, head of TI’s embedded processing and wireless division, noted that the use TI’s chips in smartphones and tablets are “less attractive” given the emergence of a few large players and vertical supplier trends in those markets. That’s something other TI officials have been talking more about in the last several weeks.

As a result, TI is “re-profiling its investments” in embedded processing and wireless because the research and development “needs to look different,” Delagi said.

His comments came in a webcast of a TI meeting with financial analysts and investors in New York.

Delagi said the company  plans to shift its focus — and R&D investments — into new embedded processing products, such as using its OMAP and other processors in industrial, automotive and home appliance applications.

He wasn’t ready to disclose other details or a time frame yet, but noted that TI has shifted its investments before as it saw products become commoditized or other trends.

The Dallas-based chipmaker combined its embedded [and] wireless businesses into one division in May.

Although TI is a supplier to the latest Kindle Fire HD tablet, it has recently lost out to rivals on new Apple and Samsung smartphones.

From TI reports financial results for 3Q12 [Oct 22, 2012]

… Rich Templeton, TI’s chairman, president and CEO.  “Our core businesses of Analog and Embedded Processing each grew revenue by 2 percent.  Our operations were disciplined, with expenses and inventory levels both down, and our core businesses grew profit faster than revenue.”

Regarding TI’s business model, which is focused on Analog and Embedded Processing, Templeton said, “These two core businesses now comprise 70 percent of our revenue.  The importance of this strategy shows in the strong cash that we generate even in weak markets and in our ability to return that cash to shareholders.  In the third quarter, our free cash flow exceeded $1 billion, and we returned more than 75 percent of it through dividends and share repurchases.  Our confidence in the long-term sustainability of our business model drove the dividend increase of 24 percent that we announced in the quarter.” 

3Q12 segment results 

 
3Q12
3Q11
Change
2Q12
Change
Analog:
         
      Revenue
$ 1,843
$ 1,557
18%
$ 1,800
2%
      Operating profit
$    460
$    414
11%
$    437
5%
Embedded Processing:
         
      Revenue
$    520
$    539
-4%
$    509
2%
      Operating profit
$      63
$    113
-44%
$      51
24%
Wireless:
         
      Revenue
$    325
$    580
-44%
$    342
-5%
      Operating profit (loss)
$    (53)
$      78
n/a
$     (51)
-4%
Other:
         
      Revenue
$    702
$    790
-11%
$    684
3%
      Operating profit*
$    370
$    209
77%
$    161
130%

*  Includes Acquisition charges and Restructuring charges/other.

Wireless: (includes OMAPapplications processors, connectivity products and baseband products)

  • Compared with both the year-ago and prior quarters, revenue declined primarily due to baseband productsRevenue from connectivity products also declined while revenue from OMAP applications processors increased.
  • Operating profit from the year-ago quarter became an operating loss due to lower gross profit.  The operating loss increased from the prior quarter due to lower revenue and the associated gross profit.

TI to reduce costs in Wireless business; OMAP™ processors and wireless connectivity solutions will focus on embedded markets [Nov 14, 2012]

Consistent with previously stated strategic plans, Texas Instruments(TI) (NASDAQ: TXN) announced today it will reduce costs and focus investments in its Wireless business on embedded markets with greater potential for sustainable growth. Cost reductions include the elimination of about 1,700 jobs worldwide.

TI previously outlined intentions to focus its OMAP processors and wireless connectivity solutions on a broader set of embedded applications with long life cycles, instead of its historical focus on the mobile market where large customers are increasingly developing their own custom chips. These changes require fewer resources and less investment.

“We have a great opportunity to reshape our OMAP processor and wireless connectivity product lines to concentrate on embedded markets. Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas,” said Greg Delagi, senior vice president of Embedded Processing. “These job reductions are something we do with a heavy heart because they impact people we care deeply about. We will work closely with all employees affected by these changes to provide a range of assistance related to compensation, benefits and job search.”

As a result of these actions, the company expects annualized savings of about $450 million by the end of 2013. Total charges will be about $325 million, most of which will be accounted for in the current quarter. TI’s fourth-quarter outlook, published on October 22, did not comprehend these restructuring charges.

New OMAP™ 5 processor-based modules spur easier, faster industrial designs [Nov 12, 2012]

Modules bring dual-core ARM® Cortex™-A15 prowess to systems that demand high-performance processing, rigorous real-time time control, advanced graphics, and fanless low power

Expanding the OMAP™ processor footprint in embedded applications, Texas Instruments Incorporated (TI) (NASDAQ: TXN), together with six leading system-on-module (SoM) vendors, today introduced OMAP 5 processor-based modules designed to simplify and speed industrial development. Based on a dual-core ARM® Cortex™-A15 architecture which is complemented by an integrated DSP, dual Cortex-M4 cores and various on-chip accelerators, TI’s OMAP 5 platform supports next-generation industrial applications such as point of service, portable data terminals and more. Select modules are on display this week at Electronica, in TI’s booth (#420 in Hall A4).

TI is committed to the expansion of OMAP processors into industrial applications that require long product life cycles, extended temperature and reliability, and real-time control and communication,” said Debasish ‘Ron’ Nag, manager of TI’s OMAP industrial business. “Our OMAP 5 processors meet rigorous industrial requirements and come backed by a support model that ensures protection and longevity of customers’ investments, solidified by our commitment to ship devices for 10 years following production. We are proud to work with top SoM vendors to ease and speed industrial designs.”

The new OMAP 5 processor-based modules build on TI’s more than 50 years of industrial experience, and optimized solutions based on Sitara™ ARM Cortex-A8, OMAP 4 and multicore processors, all of which are designed into industrial applications today. With the new OMAP 5 processor-based modules, industrial developers now have a greater range of ARM-based development options for solutions that require high-performance processing, real-time time control, advanced graphics, and fanless low power.

OMAP 5 processors: Higher performance for industrial systems
The OMAP 5 architecture keeps power levels low to decrease utility costs and brings the best of ARM’s Cortex-A15 performance to advanced industrial systems, delivering:

  • Dual ARM Cortex-A15 MPcores for high-performance application processing
  • Dual Cortex-M4 cores for efficient task offloading and power optimization  
  • Integrated DSP for flexible, high-performance, real-time processing analytics and control
  • On-chip accelerators for vision, full-HD video (1080p) and 2D/3D graphics
  • Industrial temperature qualification (40 to +85°C)

New OMAP 5 processor-based modules
The new OMAP 5 processor based modules are expected to be available to select customers in first quarter 2013 from TI’s SoM vendors. For sales information and complete details, please visit the following links:

Each leveraging unique features and benefits, the space-optimized OMAP 5 processor modules meet the industrial field’s tight security and design implementations, and are optimized to work with TI’s analog, connectivity and embedded solutions for more robust designs. Support and engineering resources available through TI’s SoM vendors help manufacturers focus on design differentiation to quickly deploy game-changing industrial offerings.

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2 Comments

  1. […] APE and ModAps spaces [‘Experiencing the Cloud’, Oct 8, 2012] was considered impossible after STMicroelectronics and Texas Intruments are exiting the mobile market as there is no chance to compe… [‘Experiencing the Cloud’, Dec 12, 2012] now we have the endgame of ST-Ericsson as decided by […]

  2. […] ST-Ericsson …stb.) kényszerű irányváltásában (Qualcomm nem tervezett feljebblépés, TI piaci kilépés, ST-Ericsson piaci kilépés), a java ugyanakkor még csak ezután […]

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