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See also the UPDATE on that from Intel Corporation’s (INTC) CEO, Brian Krzanich Presents at Sanford C Bernstein Strategic Decisions Conference 2016 – Brokers Conference Transcript of June 1, 2016.
Transistorless 3D XPoint™ non-volatile memories with speed close to RAM but with more than 10x density: 128 Gb per die in 2016 vs. the current 8Gb DRAM per die in 2015. This technology has been developed over many years by Micron and Intel jointly:
• less than 1 µsec Persistent Memory with DIMMs based on 3D XPoint™
• less than 10 µsec ultra fast Intel Optane™ SSD NVMe SSD
This will lead to a new industry shakeout, similar to one which happened between 1970 and 2016 due to the very fundamental progress in transistor densities for DRAM arrays and logic circuits on a die. See slide #3. For your convenience included here as well:
This slideshow contains 3 minutes of presentation with 11 slides followed by 7 minutes of keynote by Rob Crooke Intel SVP and GM of the Non-Volatile Memory Solutions Group at IDF16 on Shenzhen China April 13, 2016:
• 3D NAND technology focusing on cost and capacity improvements
• 3D XPoint™ technology focusing on breakthrough in speed and performance
• Demostration of the ultra fast Intel Optane™ SSD NVMe SSD, early prototype
Think especially about the last slide:
September update: Qualcomm’s smartphone AP revenues declined 17% year-over-year in the second quarter of 2015, Strategy Analytics estimated. Qualcomm maintained its smartphone AP market share leadership with 45% revenue share, followed by Apple with 19% revenue share and MediaTek with 18% revenue share. For the rest 18%: After a difficult 2014, Samsung LSI continued to recover and more than doubled its smartphone AP shipments in the second quarter of 2015 compared to the same period last year. Samsung LSI capitalised on its Galaxy S6 design-win in Q2 2015. In addition the company featured in multiple mid-range smartphones from Samsung Mobile. Full report: Smartphone Apps Processor Market Share Q2 2015: Samsung LSI Maintains Momentum
… The global tablet AP market declined 28% year-over-year to reach US$679 million in the second quarter of 2015, according to Strategy Analytics. Apple, Intel, Qualcomm, MediaTek and Samsung LSI captured the top-five revenue share rankings in the market during the quarter. Apple led the tablet AP market with 27% revenue share, followed by Intel with 18% revenue share. Qualcomm ranked number three, narrowly behind Intel. Full report: Tablet Apps Processor Market Share Q2 2015: Apple and Intel Maintain Top Two Spots
Digitimes Research saw global tablet shipments fall to 45.76 million units in second-quarter 2015, showing a 10% decrease on quarter and representing more than a 15% decrease on year. Full report: Global tablet market – 2Q 2015 End of September update
Investors.com comments on tablet and smartphone market trends — Q2’2015:1. Apple, Samsung lose ground in tablet market — LG and Huawei gain
2. Apple, Huawei [and Xiaomi] buck slowing smartphone sales trend
As the commenting articles by Investors.com are based on press releases of 2 market research companies I will give the web reference here for those press releases themselves, as well as 3 other press releases not commented on by Investors.com (if there are trend indications in the press releases themselves I will copy them alongside the web reference):
- July 29, 2015: Worldwide Tablet Market Continues to Decline; Vendor Landscape is Evolving, According to IDC“Longer life cycles, increased competition from other categories such as larger smartphones, combined with the fact that end users can install the latest operating systems on their older tablets has stifled the initial enthusiasm for these devices in the consumer market,” said Jitesh Ubrani, Senior Research Analyst, Worldwide Mobile Device Trackers. “But with newer form factors like 2-in-1s, and added productivity-enabling features like those highlighted in iOS9, vendors should be able to bring new vitality to a market that has lost its momentum.”
- July 30, 2015: Huawei Becomes World’s 3rd Largest Mobile Phone Vendor in Q2 2015 [says Strategy Analytics]
- Woody Oh, Director at Strategy Analytics, said, “… Smartphones accounted for 8 in 10 of total mobile phone shipments during the quarter. The 2 percent growth rate of the overall mobile phone market is the industry’s weakest performance for two years, due to slowing demand for handsets in China, Europe and the US.”
- Neil Mawston, Executive Director at Strategy Analytics, added, “… Samsung has stabilized volumes in the high-end, but its lower-tier mobile phones continue to face intense competition from rivals such as Huawei in Asia. … Apple outperformed as consumers in China and elsewhere upgraded to bigger-screen iPhone 6 and 6 Plus models.”
- Ken Hyers, Director at Strategy Analytics, added, “… Huawei is rising fast in all regions of the world, particularly China where its 4G models, such as the Mate7, are proving wildly popular. Huawei has finally overtaken Microsoft to become the world’s third largest mobile phone vendor for the first time ever.”
- Neil Mawston, Executive Director at Strategy Analytics, added, “Microsoft shipped 27.8 million mobile phones and captured 6 percent marketshare worldwide in the second quarter of 2015. Microsoft’s 6 percent global mobile phone marketshare is sitting near an all-time low. Microsoft continues to lose ground in feature phones, while its Lumia smartphone portfolio is in a holding pattern awaiting the launch of new Windows 10 models later this year. Xiaomi shipped 19.8 million mobile phones and captured 5 percent marketshare worldwide in Q2 2015. Xiaomi remains a major player in the China mobile phone market, but its local and international growth is slowing and Xiaomi is facing intense competition from Huawei, Meizu and others. As a result, Xiaomi may struggle to hold on to its top-five global mobile phone ranking in the coming quarters.”
- June 17, 2015: Business smartphones shipments in Q1 up 26% from last year, now 27% of total smartphone market [says Strategy Analytics]
Android was the most dominant OS in terms of business smartphone shipments in Q1, accounting for nearly 60% of all business smartphones (corporate- and personal-liable). It was also the dominant BYOD device; 68% of personal-liable shipments in Q1 were Android. Apple iOS accounted for only 27% of BYOD shipments in Q1, but was the dominant platform in terms of corporate-liable smartphones, with 48% of Q1 CL shipments. The difference in Android/iOS shipments between the CL and IL categories reflects the continuing corporate perception that iPhones are “safer” than Android-based devices.
- Shipments of personal-liable smartphones (i.e. “bring your own device,” or BYOD, phones) drove market growth in Q1
- Strategy analytics defines personal-liable devices as devices purchased by the end-user and expensed back to the company or organization, or devices purchased outright by individual users but used primarily for business purposes linking to corporate applications and backend systems.
- While personal liable devices dominate worldwide business smartphone shipments, some regions are more resistant to the BYOD trend than others. Such regions include Western Europe and Central Europe, where corporate-liable devices are the dominant types of business smartphones. In Western Europe in Q1, 61% of the 10 million business smart phones were corporate-liable. Central and Eastern Europe had a slightly higher rate of BYOD devices shipped in Q1 — 41% — but the majority of smartphones shipped in this regions was also corporate-liable. This a sharp contrast to North America, where three-quarters of business smartphone shipments are personal-liable. The trend in Western and Eastern Europe reflects the more corporate-centric approach businesses take to mobility in these regions.
- July 29, 2015: Mobile Broadband Tablet Subscriptions to Double to 200 Million by 2021, says Strategy Analytics
- Strategy Analytics forecasts global mobile data subscriptions on tablets will more than double from 2015 to 2021, reaching over 200 million
- Around the globe, over 100 million wireless connections on cellular enabled tablets will be added through 2021. By 2021 tablets will only account for 2 percent of total mobile subscriptions, a 2.7 percent population penetration rate.
- July 29, 2015: Intel Maintains Top Spot in Non-Apple Tablet Apps Processors in Q1 2015 says Strategy Analytics
⇒The global tablet applications processor (AP) market declined -6 percent year-over-year to reach $733 million in Q1 2015
- According to Sravan Kundojjala, Associate Director, “Intel maintained its top spot in the non-Apple tablet AP market in unit terms in Q1 2015. Strategy Analytics estimate Android-based tablets accounted for over 70 percent of Intel’s total tablet AP shipments in Q1 2015. We expect Intel’s Atom X3 cellular tablet chip product line to help Intel maintain its momentum in the tablet AP market.”
- Stuart Robinson, Executive Director of the Strategy Analytics Handset Component Technologies (HCT) service added, “Strategy Analytics estimates that baseband-integrated tablet AP shipments accounted for over one-fourth of total tablet AP shipments in Q1 2015, helped by a strong push from Qualcomm, MediaTek and Spreadtrum. We expect continued momentum for integrated APs as Intel, Rockchip and others join the bandwagon.”
- July 30, 2015: Windows Tablet Shipments Nearly Double in Q2’15, says Strategy Analytics
⇒Global Tablet Shipments and Market Share in Q2 2015 (preliminary)
- Windows-branded Tablets comprised 9 percent of shipments in Q2 2015, up 4 points from Q2 2014
- Android-branded Tablet shipment market share was flat at 70 percent in Q2 2015
- Apple continued its slide in market share down to an all-time low of 21 percent in Q2 2015, 4 points lower than Q2 2014
- Vendors with strong 3G and LTE connected Tablet strategies such as Huawei, LG, and TCL-Alcatel gained market share as leaders like Apple, Samsung, and the White Box community lost ground
Tablet & Touchscreen Strategies Senior Analyst Eric Smith added, “Windows share continues to improve as more models become available from traditional PC vendors, White Label vendors, and Microsoft itself though a healthy Surface lineup and distribution expansion. The key going forward will be if the coming wave of 2-in-1 Detachable Tablets is a hit with consumers or if they go the way of the Netbook—we remain cautiously optimistic on this point.”
Tablet & Touchscreen Strategies Service Director Peter King said, “Apple’s fortunes will turn around soon as it will launch the 12.9-inch iPad Pro as well as an iPad mini 4 in Q4 2015. New features in iOS 9, which are exclusive to iPad such as multi-tasking and a more convenient soft keyboard, will also help compel upgrades by owners of older iPad models. Meanwhile, Huawei and LG have posted fantastic growth primarily due to well-executed 3G and LTE connected Tablet strategies.”
Then I will add 2 additional information pieces from Strategy Analytics:
Having experienced negative growth since 2012, global PC sales are expected to rise 5 percent in 2015 driven by replacement of an ageing installed base according to Strategy Analytics’ Connected Home Devices (CHD) service report, “Computers in the Post-PC Era: Growth Opportunities and Strategies.”
Click here for the report:
- PC sales will fall by 4 percent in 2014 before returning to modest growth in 2015 and beyond to support replacement demand.
- Strategy Analytics’ consumer research of computing device usage in developed markets indicates that PCs remain essential computing devices despite healthy Tablet sales.
- Frequent Tablet usage has grown by 22 percentage points from 2011 to Q4 2013 up to 32 percent of all households while frequent Mobile PC (excluding Tablets) usage has stayed steady through this period, as 63 percent of all households indicated they frequently used Mobile PCs.
- Frequent usage of all PCs (including Mobile and Desktop PCs and excluding Tablets) remained above the 90 percent mark of all households, falling only 3 percentage points during this period.
Eric Smith, Analyst of Connected Home Devices, said: “Multiple PC ownership is falling as Tablet sales supplant replacement demand for secondary PCs mainly used for casual tasks. Still, PCs will remain essential devices as households eventually replace their primary PCs used for productivity tasks such as spreadsheet and video editing or personal banking.”
David Watkins, Service Director, Connected Home Devices, added: “The modern Tablet user experience is quickly arriving on the PC thanks to more affordable 2-in-1 Convertible PCs and new operating systems which blend traditional PC and Tablet user experiences. We see development of these forces aligning perfectly with an older PC installed base ripe for replacement in 2015.”
May 1, 2015: Children Change Disney’s Digital Strategy: “App TV” Now Central To Content Planning by David Mercer
Multiscreen TV behaviour is at the centre of television’s stormy transformation – viewing of broadcast, linear TV on the TV screen is apparently in decline while consumption on smartphones and tablets is increasing. Making sense of the big picture is increasingly challenging, and legacy players like broadcasters and the major content owners are inevitably somewhat resistant to the idea that their traditional businesses are under serious threat.
We have monitored the early stages of this transformation for the past decade and see its results in our own research, and we continue to predict further industry disruption in our forecasts. But sometimes it is only when you hear the evidence given in person by a senior executive at a leading global player that the scale of the challenge and opportunity are finally brought home.
This happened at last week’s AppsWorld event in Berlin, where I chaired the TV and Multiscreen conference. The speaker was Andreas Peters, Head of Digital for the Walt Disney Company Germany, Austria and Switzerland. Andreas presented some of the most compelling evidence I have yet heard that television is truly a multiscreen medium for the next generation of viewers.
Disney’s challenge in Germany was to launch a television show called Violetta aimed at 8-12 year old girls. It had been introduced successfully in Argentina but had failed in the UK. As it often does, Disney had invested considerable amounts in merchandising and retailers were eagerly anticipating sales of the new product lines. The show was first broadcast on German free TV on May 1st 2014 but it achieved only very low ratings.
The question for Disney managers was whether traditional TV had stopped working. A crisis meeting was held with a view to writing off the investment. Disney had previously not made its shows available online in Germany but the Violetta situation was so serious they were persuaded to experiment. Two episodes were made available on Youtube with a link to Disney’s own website. Viewing of the content on Youtube very quickly went viral until Disney had achieved a reach of 50% of 8-12 year old girls and eight million views. Violetta went on to become a success in German-speaking markets.
The evidence was clear: for some shows at least, younger children cannot now be reached using the traditional broadcast TV/big screen model. Peters explained that the Violetta experience was transformative for the Disney organisation and led to the inclusion of online and digital media as a key element in the business case for many products. In fact it also led to the development and launch of Disney’s own Watch App, which includes live streaming and seven-day catch-up programmes from the broadcast Disney Channel.
Even after the Violetta experience Disney was sceptical that an app was needed – there was a feeling that the website would be sufficient. Nevertheless the app was launched and Disney had planned for 20,000 downloads. Instead it has passed one million downloads in its first six months. Peters noted: “This was a real shock for us. We completely underestimated the demand.” Around 500,000 viewers are now using the Disney Watch app for linear television viewing, in addition to millions of shows being downloaded for catch-up viewing. Peak app viewing hours are between 6am and 8am and then between 1pm and 9pm on school days, with a different pattern at weekends. Peters made it clear that children did not want lots of features built in to the app – just like TV, they just want to hit “play” and watch.
“Our TV colleagues of course don’t want to believe this,” said Peters. “But the world has changed and it will continue to change.” Disney has also seen a knock-on effect from its app launch with an increase in free-to-air broadcast TV viewing. But the firm is now clear that mobile is not just an add-on to TV or a promotional tool; it must be an integral part of the entire process.
There are many implications for content strategy. TV and Digital have to “understand each other”, which is a challenge when the KPIs in each world are very different. As we have often heard, the video industry is crying out for a set of common metrics which can apply and support advertisers in both TV and online worlds. Video consumption patterns vary and different content may be relevant to different platforms.
But the overall lesson is clear: “TV” is not just the big screen in the corner of the living room. It must embrace multiscreen distribution strategies in order to reach its maximum potential. TV companies are betraying their audiences and their investors if they don’t target the 6.4bn addressable screens available to them.
The ultimate ultrabooks/notebooks and 2-in-1 hybrids/detachables with the upcoming Intel Core M processors
What is presented below it is an incredible advance versus that of one a half year ago. For comparison see my earlier Saving Intel: next-gen Intel ultrabooks for enterprise and professional markets from $500; next-gen Intel notebooks, other value devices and tablets for entry level computing and consumer markets from $300 [this same blog, April 17, 2013] post. Note as well that with Core M Intel is able to differentiate its enterprise offerings from the consumer ones, as the latter could be mainly represented by products like in ASUS EeePC revival with the $199/€199 EeeBook X205 at IFA 2014: the Chromebooks alternative based on Windows 8.1 with Bing [this same blog, Sept 6, 2014].
See also the report about IDF 2014 PC Mega Session: 2-in-1s to Rule Mobile, Wireless Everything Coming Soon [Tom’s Hardware US, Sept 10, 2014]
They are of the fanless design! So it is time—says Intel—to upgrade your aging PCs to these business-ready touch devices built on the latest Intel Core processors and Windows 8.1:
Touch business-grade performance [Intel YouTube channel, Sept 4, 2014]
For small businesses a special business app bundle from Intel (already available with selected business tablets) is also providing an immediate opportunity to boost productivity:
Intel Business Apps [Intel YouTube channel, Sept 8, 2014]
Chip Shot: Intel Business App Portfolio Now on Windows OS and Intel® Core™ M Processor-based Devices [News story on Intel Newsroom, Sept 5, 2014]
The Intel® Business App Portfolio, a collection of useful business apps to boost productivity and enhance security of small businesses, is now available on the latest Intel-based tablets and 2 in 1 devices running the Windows OS. And, with the app bundle on some of the newest devices powered by Intel® Core™ M processors, users will realize additional benefits with up to 8 hours of battery life with full HD display and up to 50 percent faster CPU performance. Previously offered only on Intel-based tablets running the Android OS, the mobile app bundle includes special offers—valued at more than $250—and is now available with the following Windows apps:
AirWatch, Calc Pro HD, CamCard, Dictionary, DocuSign, Drawboard PDF, McAfee Anti-Virus Plus, Microsoft Office 365 Business, OneDrive, OneNote, Skype, SpeechTrans and Splashtop Business.
It is available for free by purchasing a qualifying device from Intel® Technology Provider members in North America, Latin America and Europe or through Amazon.com (in the U.S. and Canada). Visit www.intel.com/businessapps to learn more.
Chip Shot: Intel Releases Mobile App Bundle for Business Tablets [News story on Intel Newsroom, Aug 4, 2014]
Intel® Business App Portfolio is now available for select tablets based on Intel® processors and Android. Intel has bundled a collection of top business apps that include Evernote, ooVoo, Dropbox, McAfee, DocuSign and others, to turn tablets into enhanced productivity tools for workers. With the app bundle, an employee can easily create and share documents and presentations; video conference; access company files in the cloud or a remote PC; guard sensitive data from viruses; and capture images and signatures for business contracts. At an estimated value over $250, the portfolio is a cost-effective solution that meets the needs and budgets of small businesses worldwide to accelerate achieving goals of improving customer interactions and sales growth. The app bundle is available for free by purchasing a qualifying tablet from Intel® Technology Partner members in North America, Latin America and Europe or through Amazon.com (in the U.S. and Canada).
The categories in Intel® Business App Portfolio (for small businesses) as of Sept 9, 2014:
|Assist||Calc Pro HD3
|ABBYY Business Card Reader13
|Create||Office 365 Business1
McAfee Antivirus Plus11
|McAfee Antivirus Plus11|
1 Special Offer: Coming October 1, 2014 to the Intel® Business App Portfolio! Receive 15% off a 1-year paid subscription to Office 365 Business, which includes the familiar and powerful Word, Excel, PowerPoint, OneNote and Outlook applications, as well as cloud storage with OneDrive! ($23 USD value)
2 Special Offer: 2-month subscription of Splashtop Business ($10 Value)
3 Special Offer: Receive 60% off the Full Version of the Calc Pro HD (just $2.99) when you redeem this special offer.
4 Special Offer: Receive the Dictionary app from Farlex, Inc. for free ($1.99 USD value)
5 Special Offer: One year of SpeechTrans Ultimate ($24 USD value)
6 Special Offer: Extend CamCard free trial from 6 months to 12 months with promo code! ($5 USD value)
7 Special Offer: Special 20% discount on a DocuSign annual subscription (up to a $72 USD value)
8 Special Offer: A one-year extended trial of Drawboard PDF
9 Special Offer: Three months of unlimited calling for free!. That means, in addition to making free Skype to Skype calls, you can also call offline contacts on their mobiles and landlines.
10 Special Offer: 30-day trial with a consultation from a member of dedicated Airwatch SMB account team.
11 Special Offer: 1-year McAfee Antivirus Plus subscription ($35 USD value)
Android specific apps only:
12 Special Offer: 14-day free trial of Dropbox for Business
13 Special Offer: Receive Serial Number and download instructions for the full, premium version of ABBYY Business Card Reader.
14 Special Offer: Receive 3-months Premium service and lifetime paid [CamScanner] app features (totals $20) upon sign-up
15 Special Offer: One-year of ooVoo Video Conferencing Service
16 Special Offer: Activation code to upgrade PrintHand to Premium Mode.
17 Special Offer: While we highly recommend you utilize [MS Office compatible] WPS Office for your office document needs on your Android device, the application is free to use so there is no promotional offer available at this time.
18 Special Offer: While we highly recommend you utilize Evernote for your note taking needs on your Android device, the application is free to use so there is no promotional offer at this time.
19 Special Offer: 30-day trial of the Swype keyboard & dictation.
Mobile Devices (Intel based 2 in 1s and tablets) for the Intel® Business App Portfolio as of Sept 9, 2014:
|Acer Iconia A1-830 (7.9”, Z2560)
ASUS MeMO Pad (10.1”, Z2560)
Dell Venue 7 (7”, Z2560)
ASUS Transformer Book* T100 (10.1”, Z3740)
|Acer Iconia A1-830
ASUS MeMO Pad
Dell Venue 7
Samsung Galaxy Tab* 3 (10.1”, Z2560)
Computex 2014: What’s next for Intel: Cheaper 4K, new Core M chip and 3D cameras [Network World YouTube channel, June 5, 2014]
Intel® 14 nm Technology [an Intel Silicon Innovations page as of Sept 9, 2014]
Ultra-fast, energy-sipping devices powered by Intel
Supporting a wide range of products from mobile devices to servers, 14 nm transistors improve performance and reduce leakage power. Intel’s 14 nm technology will be used to manufacture a wide range of high-performance to low-power products including servers, personal computing devices, and products for the Internet of Things. The first systems based on the Intel® Core™ M processor will be on shelves for the holiday selling season followed by broader OEM availability in the first half of 2015. Additional products based on 14 nm process technology will be introduced in the coming months.
Using 2nd generation 3-D tri-gate transistors, the 14 nm technology delivers industry-leading performance, power, density, and cost per transistor, and will be used to manufacture a wide range of products, from high performance to low power.
Smaller is better
Intel’s 14 nm technology provides good dimensional scaling from 22 nm. The transistor fins are taller, thinner, and more closely spaced for improved density and lower capacitance. Improved transistors require fewer fins further improving density, and the SRAM cell size is almost half the area of that in 22 nm.
14 nm manufacturing
Intel’s 14 nm process and lead system-on-a-chip (SoC) product are now qualified and in volume production, with fabs in Oregon (2014), Arizona (2014), and Ireland (2015).
Microscopic Mark Bohr: Intel 14nm Processors Explained [Intel YouTube channel, Aug 11, 2014]
Intel® Core™ M Processor [an Intel Core Processors page as of Sept 9, 2014]
Versatile, Mobile, Blazing Fast
Intel® Core™ M and Intel® Core™ M vPro™ processors
With the world’s first processors built on 14 nm manufacturing process technology, PC performance is now possible within a range of ultra-mobile 2 in 1 devices. Blazing fast speed combined with the highest level of energy efficiency in Intel’s history enables razor-thin, fanless designs that meet your needs for both performance and mobility. The Intel® Core™ M vPro™ processor provides additional built-in security features1 to deliver the perfect combination of business-class performance and battery life to keep you productive longer no matter where you are. For small businesses, the Intel® Core™ M processor provides an optimal combination of business-class performance and battery life, so your employees have the power to stay productive longer, no matter where they work. Free yourself from carrying multiple devices and get the best of both worlds in a 2 in 1 device with the conflict-free Intel Core M and Intel Core M vPro processors.
IFA 2014: Intel presents new Core M Processors [allroundpc Youtube channel, Sept 5, 2014]
New Intel® Core™ M Processor Enables Razor-thin, Fanless Designs with the Optimal Blend of Beauty, Performance and Battery Life; Available Holiday 2014 [IFA 2014 press release, Sept 5, 2014]
- Acer*, ASUS*, Dell*, HP*, Lenovo* and Toshiba* to introduce new Intel® Core™ M processor-based 2 in 1s. Some systems available starting in October.
- Intel Core M processor delivers amazing performance and battery life for the thinnest, fanless 2 in 1 devices.
- At a power-sipping 4.5 watts, it is the most energy-efficient Intel® Core™ processor in the company’s history.1
IFA, Berlin, Sept. 5, 2014 – At IFA, a global trade show for consumer electronics and home appliances, Intel launched the new Intel® Core™ M processor, which will power new 2 in 1 devices from a variety of manufacturers including: Acer*, ASUS*, Dell*, HP*, Lenovo* and Toshiba*. Delivering the optimal blend of mobility and performance, Intel’s new processor was purpose-built for amazing performance in the thinnest, fanless ultra-mobile devices. The Intel Core M processor can power razor-thin devices with Intel Core processor-level performance and deliver up to double the battery life when compared to a 4-year-old system.2
“We’ve been on a multi-year mission to address end-user requirements and transform mobile computing,” said Kirk Skaugen, senior vice president and general manager of personal computing at Intel Corporation. “The introduction of Core M marks a significant milestone in that journey. Core M is the first of a new product family designed to deliver the promise of one of the world’s thinnest laptops and highest performance tablets in a single 2 in 1 device.”
Faster Performance, Even More Battery Life
The Intel Core M processor enables up to 50 percent faster compute performance and 40 percent faster graphics performance versus the comparable, previous 4th generation Intel Core processor.3 Consumers with older PCs will notice a more significant performance improvement. The Intel Core M processor delivers up to two times the compute performance and up to seven times better graphics compared to a 4- year-old PC, for example.2
In 2013, Intel delivered the biggest generation-over-generation battery life improvement in the company’s history. The Intel Core M processor and platform power reductions raise the bar on battery life even higher. The Intel Core M processor can handle more than 8 hours of video play, which is up to 20 percent (1.7 hours) longer battery life versus the previous-generation Intel Core processor4 and double the battery life of the average 4-year-old PC.1
Thin, Fanless 2 in 1s Available for Holiday 2014…and Beyond
The Intel Core M processor package is 50 percent smaller and, at 4.5 watts, has 60 percent lower thermal power than the previous generation.5 This lets OEMs design sleek, fanless systems less than 9 mm thin – thinner than an AAA battery and today’s sleekest laptops. There are already more than 20 Intel Core M processor-based OEM products in the development pipeline. The first systems based on the Intel Core M processor will be on shelves for the holiday selling season.
At IFA, manufacturers including Acer, ASUS, Dell, HP, and Lenovo unveiled new, coming-soon Intel Core M processor-based devices across a range of sizes, styles and price points.
- In Q4, Acer will expand its popular 2-in-1 series of notebooks with the Aspire Switch 12*, featuring a 12.5-inch FHD display with unique kickstand and magnet keyboard to move smoothly between five modes.
- ASUS introduced the ASUS Zenbook UX305*, an incredibly light and thin Ultrabook™ with a 13-inch QHD displayAsus unveiled the UX305, its newest flagship laptop at IFA 2014 this week. The device, it claims, is the world’s thinnest 13-in QHD+ ultrabook, giving it one of the highest pixel densities of any computers on the market. It faces competition from the Lenovo Yoga 2 Pro and the Samsung ATIV Book 9 as well as the Apple MacBook Pro Retina Display, although we expect vendors to refresh their current thin-and-light laptop range very soon. At only 12.3mm thick and weighing 1.2Kg, it is light enough to be carried comfortably with one hand. Its specification sheet lists an Intel Core M processor (the 5Y10), Windows 8.1, 4GB or 8GB of LPDDR3 memory, either 128GB or 256GB SSD, an Intel HD Graphics 5300 subsystem, a webcam and a 6-cell, 45Whr battery. As for connectivity, it has three USB ports, one mini-HDMI output and a SD card reader.
and the ASUS Transformer Book T300FA* 2 in 1, which was unveiled during the Intel keynote. The Transformer Book T300FA is a high-performance 2 in 1 and is expected to be available in Europe this fall for an estimated €599. Looking ahead, ASUS plans to go even thinner with the ASUS Transformer T300 Chi*.
- Dell has announced its first commercial 2 in 1, the Latitude 13 7000 Series*, which combines a lightweight business Ultrabook and a detachable tablet in one powerful, no-compromise device.
- HP further extends its award-winning ENVY portfolio with the addition of two new HP ENVY x2* detachable PCs, available in 13.3-inch and 15.6-inch form factors.
- The new [11.6”] Lenovo ThinkPad Helix*, available in October, is 12 percent lighter and measures 15 percent thinner than its predecessor while packing even more power thanks to the Intel Core M processor.
[From Lenovo on Sept 4 with the VP PCG Marketing & Design, Dilip Bhatia: “the most complete 2-in-1 in the marketplace”] The ThinkPad Helix is the industry’s leading 2-in-1 device. Powered by the latest Intel Core processor family, sporting a new revolutionary fan less design and up to 12 hours of battery life. Built for business, the ThinkPad Helix. Learn more about Lenovo: http://lnv.gy/lenovo[From Lenovo on Sept 4 with the product manager for ThinkPad Helix, Sachin Pathak: “specific focus on productivity in business … in line with Lenovo’s multimode strategy to 4 earlier modes now a new desktop mode has been added … etc. –> for ‘full PC connectivity’ ultimately satisfying the ‘business traveller’ ”] Join Kevin Beck for the First Look at the new Think Helix. Lots of awesome new features, including an innovative new fanless design, up to 12 hours of battery life and plenty more surprises. Learn more about Lenovo: http://lnv.gy/lenovo
Intel also previewed a forthcoming Intel Core M processor-based design from Toshiba, and said broader availability of Intel Core M processor-based devices is expected in the first half of next year.
To further system choice and availability, Intel said it is working with ODMs including Wistron* and others. Wistron plans an Intel Core M processor-based design inspired by the Intel “Llama Mountain” reference device. Intel first unveiled the stunning, fanless Llama Mountain reference device, which measures 7.2 mm thin and weighs a mere 670 grams, at Computex in Taiwan earlier this year.Intel Core M “Broadwell-Y” 2-in-1 Tablet / Ultrabook Reference Design hands on at Computex 2014 http://www.mobilegeeks.com http://www.mobilegeeks.de We got to quickly check out Intel’s new reference design für “Broadwell-Y” based Intel Core M ultrabooks and 2-in-1 tablet style devices. It’s called “Llama Mountain 2” and has a 12,5 inch QHD IPS display with 2560×1440 pixels. The device is only 7,5 millimeters thin and weighs in under 800 grams. It shows what to expect from this years 2-in-1 devices coming in from Intels many hardware partners in the run up to the holiday shopping season!
A “Conflict-Free” Processor; Additional Features
Intel Core M is a “conflict-free” product, which means this product does not contain conflict minerals (tin, tantalum, tungsten and/or gold) that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo (DRC) or adjoining countries.
The Intel Core M processor is available in several versions: the up to 2.0 GHz Intel Core M-5Y10/5Y10a processors and the up to 2.6 GHz Intel Core M-5Y70 processor. The Core M-5Y70 is the highest performing Intel Core M processor and is also available with Intel® vPro™ technology for business 2 in 1s with built-in security features to help protect data, user identities and network access.6
Additional Intel Core M platform features include support for high-quality audio, Intel® Wireless Display 5.0, Intel’s second-generation 802.11ac products and will evolve to support wireless docking with WiGig from Intel. For more information visit:www.intel.com.
1Energy efficiency based on SPEC CPU2006 Intel estimates for both performance and core power. Comparison made vs. Intel prior generation Intel Core family CPU Processors.
2Intel® Core™ M-5Y70 Processor (up to 2.60GHz, 4T/2C, 4M Cache) vs. Normalized to a 4-year-old PC with Intel® Core™ i5-520UM. Performance based on SYSmark* 2014. Intel® Core™ M 5Y70 compared to Intel® Core™ i5-520UM. Weight based on Intel® Core™ M processor-based 2 in 1 based on Intel® FFRD Llama Mountain. Old PC is OEM laptop with Intel® Core™ i5-520UM and 62WHr battery, 3 lbs weight, 1.1-inch thick.
3Up to 50 percent faster vs. 4th generation Intel Core processors based on: Specfp_rate_base 2006 comparing Intel® Core™ M-5Y70 Processor compared to previous-generation Intel® Core™ i5-4302Y at 4.5W. Up to 40 percent faster graphics vs. 4th generation Intel Core processors based on: 3D Mark Ice Storm comparing Intel® Core™ M-5Y70 Processor with Intel HD graphics 5300 vs. Previous Generation Intel® Core™ i5-4302Y at 4.5W with HD Graphics 4200.
4Intel Core M battery life tested vs. 4th generation Intel® Core™ processor based platforms – 11.6-inch panel; 19×10; 200 nits; 35WHr battery; SSD; 4GB memory. Full HD Local Video Playback Battery Rundown-measured using a Tears of Steel 1080p 10 Mbps video. Configuration: In the device settings, disable all radios. Disable Intel® Display Power Saving Technology (Intel® DPST), set up the system to specified screen brightness using a full screen white background, and re-enable Intel DPST. Turn OFF the adaptive brightness setting under Power Options in Control Panel. Set “Dim the display” to never on both battery and AC. Set “Put the computer to sleep” to never on both battery and AC. Wait 15 minutes after boot. Launch the default video player (Windows* 8.1 Style UI video player for win), start the workload video in a loop, and disconnect the AC plug to start the test. Measure the time until battery is exhausted.
54th generation Intel® CoreTM Processor (40 X 24 X 1.5 mm; 960 mm; 11.5W) vs. Intel® Core™ M processor (30 X 16.5 X 1.05 mm; 495 mm; 4.5W)
6No computer system can provide absolute security. Requires an enabled Intel processor, enabled chipset, firmware and/or software optimized to use the technologies. Consult your system manufacturer and/or software vendor for more information.
Intel Mobility at Computex 2014 with Core-M, WiGig, RealSense [Steve Paine YouTube channel, June 10, 2014]
– under Kirk Skaugen –> [46:23]:
>>> Reinvention of the Desktop
>>> 2 in 1 Momentum and the Intel Core M Processor
>>> User Experience at Intel
– then under Herman Eul –> [1:20:38]
>>> The Year of Intel Inside Your Tablet
>>> Powerful Smartphones
Intel’s desperate attempt to establish a sizeable foothold on the tablet market until its 14nm manufacturing leadership could provide a profitable position for the company in 2016
The stock market is over-optimistic about that: Intel tablets could cure [stock] market conditions [Saxo TV – TradingFloor.com YouTube channel, April 16, 2014]
I am—nevertheless—highly sceptical about that as Allwinner to continue the No. 1 position on Android tablet application processor market with the new UltraOcta A80 SoC optimized for premium devices, without the premium cost, also made universal accross other devices (TV box, notebook, smart TV, All-in-one and digital signage), and operating systems (ChromeOS, Smart TV, Windows, Ubuntu and Firefox OS) [‘USD 99 Allwinner’ blog, April 16, 2014]. My skepticism is also based on The lost U.S. grip on the mobile computing market, including not only the device business, but software development and patterns of use in general [‘Experiencing the Cloud’, April 14, 2014].
You can judge all that for yourself as the background and my analysis behind Intel’s tablet strategy could be found in the following sections of this post below:
- Intel’s Mobile and Communications Group (MCG), which the Tablet Group is just a part of, is the largest loss maker segment with losses even growing to $3.15B in 2013 from $1.78B in 2012, and continuing at least into 20145
- Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.
- Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay Trail-based tablets, while hoping to level the playing field with its TSMC produced SoFIA SoCs for the 2015 tablet market.
To understand the technical and business development aspects behind that strategy read my previous posts as well:
– Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter [‘Experiencing the Cloud’, April 11, 2014]
– IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
– The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]
1. Intel’s Mobile and Communications Group (MCG), which the Tablet Group is just a part of, is the largest loss maker segment with losses even growing to $3.15B in 2013 from $1.78B in 2012, and continuing at least into 2014
Source: Download Quarters Q1 2014 [Intel Corporation – Investor Relations, April 16, 2014]
MCG is one of the new operating segments representing the following organisational responsibility, which is aligned with Intel’s new critical objectives (this particular segment was previously buried in the Other Intel Architecture Group):
- Mobile and Communications Group (MCG): MCG includes the Phone Group, the Tablet Group and Multi-Comm, all previously part of the Other IA operating segments.
- Mobile and Communications Group: Delivering platforms designed for the tablet and smartphone market segments; as well as mobile communications components such as baseband processors, radio frequency transceivers, Wi-Fi, Bluetooth*, global navigation satellite systems and power management chips.
Note that the previous structure of operating segments (since the end of 2012) was as seen on the right. As far as the organizational size is concerned, according to Infineon Completes Sale of Mobile Phone Business to Intel – New Company Intel Mobile Communications starts operations [Infineon press release, Jan 31, 2011]:
Following the sale, approximately 3,500 employees in total will move globally from Infineon to the new company Intel Mobile Communications GmbH (IMC). IMC will be headquartered in Neubiberg near Munich, Germany.
Then according to Intel® Mobile Communications Profile [Intel, Jan 6, 2012]:
Intel Mobile Communications GmbH is a subsidiary of Intel Corporation headquartered in Santa Clara, USA. The company develops and markets innovative semiconductor products and solutions for mobile communications – most notably in the rapid-growth market segments of smart phones, tablets and ultra-low-cost mobile phones.
The company has approximately 4,000 employees all over the world, about 1,700 of whom work in Germany where the headcount at the company headquarters in Neubiberg near Munich is approximately 1,200. Other German sites are Ulm, Regensburg, Duisburg, Dresden, Braunschweig and Nuremberg. Intel Mobile Communications is represented in altogether 17 countries around the world and has a strong presence in the Asian growth markets.
Considering that the Mobile and Communications Group (MCG) of today was put together from Intel Mobile Communications, the Tablet Group and the Phone Group, the overall number of employees in MCG is quite probably more than 6000 people.
Note that as of May 2013 MediaTek had 6,880 employees and ARM Holdings’ workforce at the same time was 2,261. As of March 2014 Allwinner Technology had 550+ employees (450 of which were engineers). In July 2013 Rockchip had more than 500 employees, 80% were engineers. In September 2013 Spreadtrum had 1,506 employees.
The 4000 strong Multi-Comm business is mostly engaged in standalone baseband processor market which had the following sales structure in 2013 according to Forward Concepts [March 24, 2014]:
Intel, the 2nd leading supplier of 3G thin modems in 2013 – will likely become the 2nd leading supplier of 3G/4G thin modems in 2014. Their focus will be on winning 3G/4G modem orders for notebooks and tablets. They will be challenged by Marvell’s 3G/4G PXA802 TD- LTE modem, which also supports TD-HSPA+ and is already shipping to ZTE.
Intel was—however—warning in its Nov 21, 2013 Investor Meeting presentation that:
In fact Strategy Analytics was painting a rather dark picture in Qualcomm’s Dominance Continues with 64 percent revenue share says Strategy Analytics [Feb 21, 2014]:
Qualcomm, MediaTek, Intel, Spreadtrum, and Broadcom captured the top-five revenue share spots in the cellular baseband processor market [which the standalone is just a part of] in 2013. Qualcomm dominated with 64 percent revenue share, followed by MediaTek with 12 percent revenue share and Intel with 8 percent revenue share.
Sravan Kundojjala, Senior Analyst, explains “Qualcomm domination in the cellular baseband market continued in 2013, thanks to its early investments in multi-mode LTE technology. The LTE baseband landscape is expected to be a crowded one in 2014 with several vendors including Broadcom, Ericsson, Intel, Marvell, MediaTek, NVIDIA, Spreadtrum and others are all set to bring commercial multi-mode LTE chip products to the market and this could help drive LTE down into mid-to-low tier devices.”
According to Stuart Robinson, Director of the Strategy Analytics Handset Component Technologies service, “Strategy Analytics calculates that revenue from baseband-integrated applications processors represented over 60 percent of total baseband revenue in 2013, up from 48 percent in 2012. Most baseband vendors have now transitioned their portfolios to include integrated products in order to boost their revenue share.”
According to Christopher Taylor, Director of the Strategy Analytics RF and Wireless Componentservice, “MediaTek overtook Intel to capture the number two spot in the 3G UMTS baseband market in 2013, by Strategy Analytics estimates. MediaTek capitalized on its smartphone chip momentum and improved its baseband-mix. MediaTek’s recent LTE chip announcements could potentially improve its baseband revenue share in future.”
Such a doomsday scenario was even more present in Qualcomm, MediaTek in Two-Horse Race, Says CLSA; Game Over for BRCM, Etc. [Tech Trader Daily at Barrons.com, Apr 11, 2014]
… and predicting many of the challengers will fold up without making a dent in Qualcomm’s position.
We believe that the baseband battle is largely over and expect more consolidation in the next 1 – 2 years. Nvidia is already shifting its investments, and we see a strong possibility that Broadcom exits in the next 6 – 9 months. Intel’s new management may have a bit more time, but we do not see enough opportunity to justify its $2bn+ investments. Marvell is least likely to exit in our view, but we expect it to remain a niche player. Overall, we expect the Qualcomm / MediaTek duopoly to get even stronger in the coming years and see positive implications for the overall industry profitability.
The baseband market has seen meaningful consolidation over the years. In 2006, there were 15 vendors in the market including larger analog IC vendors such as Texas Instruments, Freescale, and Analog Devices. The market has contracted to about 9 vendors by 2008 and currently has 7 vendors, after the recent consolidation at ST-Ericsson and Renesas.
Even if second tier vendors make significant progress in LTE, we simply do not see enough opportunity for all these vendors to achieve profitability any time soon.
MediaTek has a higher share in shipments of Chinese smartphones:
Chinese telcos, in particular China Mobile, are aggressively expanding their 4G networks, and China Mobile is targeting 100m LTE devices for 2014. While China Mobile’s target does appear aggressive, Qualcomm appears to be dominating the early shipments. We expect MediaTek-based LTE phones to start shipping in the next few months and expect a majority of MediaTek’s 3G customers to stick with the company as the China market transitions to 4G. Chinese smartphone OEMs lack the R&D capability of their international peers, and as a result, rely on turnkey solutions from MediaTek and Qualcomm. While MediaTek appears a bit late with LTE, we expect the company to maintain a strong share of the China LTE market longer term given its relationships with domestic handset manufacturers.
2. Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.
For an Intel Clover Trail+ (pre-Bay Trail-T) tablet: A Four-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014]
But Intel is cheating here, especially by being at least 2 times more expensive than the others (all the below prices are “best retail ones”), even discounting the 3G call capability:
- $300 (but has 3G call capability as well): Asus Fonepad 7 (Intel Atom Processor Z2560 (2 Clover Trail+ cores/4 threads, 1MB Cache, 1.60 GHz) since Q2’13)
(++Review Asus Fonepad 7 ME372CG Tablet [Notebookcheck.net, Nov 13, 2013)
- $119: Amazon Kindle Fire [7”] HD* (TI OMAP 4460 Processor (2 Cortex-A9 cores, 1.20 GHz))
[* Intel is cheating even more here as the 2nd generation figured in the above test has been replaced half a year ago by a 3d generation 7” Kindle Fire HD tablet which contains the TI OMAP 4470 with 2 Cortex-A9 cores, 1.5 GHz.]
- $160: Samsung Galaxy Tab 3 7” (ARM Cortex A9 Processor (2 Cortex-A9 cores, 1.2 GHz) )
- $139: Lenovo IdeaTab A1000 (ARM v7 Cortex A9 Processor (MediaTek 8317, Dual Core 1.2 GHz) )
The same cheating is in another new Intel video: A Three-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014] where the $140 Dell Venue 7 16GB, having the same Z2560 CloverTrail+ processors goes against the same 2nd generation Amazon Kindle Fire [7”] HD and the also same Samsung Galaxy Tab 3 7”:
And finally the cheating in the 3d new video is even more inexcusable: Tablets with Intel Inside® vs. the Competition: Samsung as here the $305 Samsung Galaxy Tab 3 10.1” tablet with the same 1.6 Ghz Z2560 (and list price of is compared with the $200 Samsung Galaxy Tab 2 10.1” having just a 1 GHz Cortex-A9 dual core processor:
3. Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay-Trail-based tablets, while hoping to level the playing field with TSMC produced SoFIA SoCs for the 2015 tablet market
What is contra revenue? [Accounting Tools, March 5, 2013]
Contra revenue is a deduction from the gross revenue reported by a business, which results in net revenue.
Contra revenue transactions are recorded in one or more contra revenue accounts, which usually have a debit balance (as opposed to the credit balance in the typical revenue account). There are three commonly used contra revenue accounts, which are:
- Sales returns. Contains either an allowance for returned goods, or the actual amount of revenue deduction attributable to returned goods.
- Sales allowances. Contains either an allowance for reductions in the price of a product that has minor defects, or the actual amount of the allowance attributable to specific sales.
- Sales discounts. Contains the amount of sales discounts given to customers, which is usually a discount given in exchange for early payments by customers.
In fact what Intel calls in accounting terms “contra revenue” it actually represents the subsidies paid to tablet manufacturers in order bring the Bill of Materials cost of Intel tablets into line with ARM based tablets. Intel was forced into these subsidies otherwise tablet manufacturers weren’t going to offer Intel based tablets.
Intel aggressively promoting tablet CPUs in China [DIGITIMES, April 14, 2014]
Intel has resorted to an aggressive pricing strategy to promote sales of its tablet-use processors, particularly in China, a move which apparently will take on Qualcomm and MediaTek, while ramping up its market share, according to industry sources.
Prices of Intel’s mainstream quad-core tablet CPUs have dropped to below US$5, which are almost on par with those offered by China-based chipset suppliers such as Rockchip Electronics and Allwinner Technology and even below those available from Nvidia, Qualcomm and MediaTek, said the sources.
Consequently, the number of Intel-based tablets is likely to expand in a great proportion as more and more China-based brand and white-box tablet vendors are expected to use Intel’s tablet CPUs to develop new products, the sources revealed.
Intel’s new policy also focuses on deepening its relationship with the supply chain in China, highlighting by its recent announcement of establishing an Intel Smart Device Innovation Center in Shenzhen and a US$100 million Intel Capital China Smart Device Innovation Fund, commented the sources.
To encourage China-based tablet makers to use Intel’s CPUs, the chipset vendor is offering assistance in terms of design, technology and marketing, the sources indicated.
Intel’s offerings will be particularly attractive to white-box tablet makers as they can optimize low-priced chipsets and advanced technologies to roll out competitive models for the entry-level segment, added the sources.
Intel aims to ship 40 million tablet CPUs in 2014, including entry-level Bay Trail family and SoFIA 3G platform products, the sources noted.
Intel Beats on Bottom Line, Misses Revenue Expectations for Q1 Results [TheStreet YouTube channel, April 15, 2014]
From Intel Reports First-Quarter Revenue of $12.8 Billion Operating Income of $2.5 Billion, up 1 Percent Year-over-Year [news release, April 15, 2014]
Mobile and Communications Group revenue of $156 million, down 52 percent sequentially and down 61 percent year-over-year.
From Intel’s CEO Discusses Q1 2014 Results – Earnings Call Transcript [Seeking Alpha, April 15, 2014] ragarding the tablet strategy which is carried out by the Mobile and Communications Group:
Brian M. Krzanich – CEO: … We set an aggressive goal of shipping 40 million tablet SOCs this year. And I’m happy to say we’ve tallied more than 90 designs on Android and Windows and shipped 5 million units in the first quarter, placing us squarely on track to that goal.
We demonstrated SoFIA, our first integrated apps processor and baseband, after adding it to the roadmap late last year. We’re on track to ship the 3G solution to OEMs in Q4 2014, with the LTE version following in the first half of 2015.
We also shipped our first Quark SoCs for the Internet of Things and announced an upgrade of Edison to the Silvermont Atom architecture. Edison is on track to ship this summer.
And in the Technology and Manufacturing Group, who’ve worked to advance Moore’s Law as foundational to our long-term success, we began production on our 14-nanometer process technology and remain on track to launch Broadwell in the second half of the year.
And the foundry team extended our collaboration with Altera to the development of multi-dye devices that take advantage of our world-class package and assembly capabilities and Altera’s leading-edge programmable logic.
Stacy J. Smith – EVP and CFO: … The Mobile and Communications Group is down 61% from a year ago. The underlying dynamics are consistent with what we shared at the investor meeting last November.
We’re seeing a decline in our feature phone and 2G/3G multi-[com] [ph] business, as we’re in the midst of a transition to integrated LTE solutions. In addition, the ramp in tablet volume is being offset by an increase in contra revenue dollars.
We’re winning designs and ramping our tablet volume rapidly and we have design wins in LTE that will result in a second half revenue ramp.
Let me even back up and give you — again restate the strategy of what we’re doing here. … what we’re doing is we’re taking Bay Trail, which is a product really designed for the PC market, and we made the decision to take it broadly across different segments of the tablet market this year.
It brings along with it, at least over the course of 2014, a higher bill of materials. And that’s independent from the SOC cost. It’s the power management subsystem, it’s the motherboard that it goes on, it’s the memory solution, those kinds of things. And so, we’re providing some contra revenue to offset that bill of material delta over the course of 2014.
Now, as we said, we’re doing value engineering with our customers and our partners. And so we’re bringing down that bill of material over the course of 2014 independent of any changes to our SOC. …
Brian M. Krzanich – CEO: … We have a series of improvements. They have already started to kick-in in some cases around our power management systems, the number of layers in our motherboards, the memory system integration. All of those things we’ve worked on and actually have started to see the advantages already in our costs.
Stacy J. Smith – EVP and CFO: So, I think on a like dollars per unit, it comes down pretty dramatically over the course of 2014. And it should be relatively small, if at all, as we get into 2015. And it’s, again, the enablement we’re doing around the bill of materials.
And then we also have new products coming into the marketplace, like SoFIA, that’s targeted at the low end, and then in 2015 you’ll see Broxton, which is an SOC more for the mid-range to high-range of the market coming into our product portfolio.
So, the combination of all of that gives us a better cost structure with our own products and a better cost structure overall with the bill of materials as we enter 2015 and then work through 2015.
We’ll have significant unit growth in tablets. But remember that contra revenue isn’t just a gross margin impact; it’s actually a subtraction from revenue. And so that will mute the revenue growth for the segment because you have that negative as we get into the back half and ship more tablets. …
C.J. Muse – ISI Group: In terms of integrated LTE, you’ve talked about when we’ll first see that. But curious when you expect to bring that in house at Intel.
Brian M. Krzanich – CEO: We’ll bring that in on our 14-nanometer process either late 2015 or early 2016. We’re still battling back and forth on how fast we can bring it in and at what impacts that has. 14-nanometer is the technology there.
Blaine Curtis – Barclays Capital: … Maybe actually follows up on CJ’s prior question. The MPG business that you’re now breaking out, it’s pretty clear it’s losing $3 billion, $3.5 billion. How do you think about this business?
Obviously you’re trying to ramp the product set you are a bit behind. You’re entering from the low end and that pricing seems quite tough. You’re facing some subsidies that you have to do on the tablet side.
Are there some milestones that you look at to get this business back profitable? Or maybe would you consider this strategic enough that you would consider continuing to run this as a loss?
Brian M. Krzanich – CEO: So, you asked several questions in there, so let me start to pars it apart. Absolutely this is a strategic business, so let’s just start with that. We think this is critical and we said this in our prepared statements. It’s critical from 2 in 1 devices down through the Internet of Things.
You look across the connectivity requirements there; more and more of the devices are requiring integrated connectivity, whether it be LTE, 3G, Wi-Fi, Bluetooth and all of these connectivities are becoming more and more required.
We don’t go into these businesses thinking that we’re going to lose money. We believe we have a roadmap to get to profitability in that business. The milestones that I look at — and so I’ll give you those for yourself to look at, we have the 7160, the current LTE version out there. We’re the second in LTE. We have the 7260 launch this quarter. I think that’s a critical there.
Again, we’re closing the gap with our competition. We’re bringing out leading edge Cat 6 capability with carrier aggregation. That’s a critical milestone. That puts — that closes the gap and puts us firmly in the LTE capability.
The next one is SoFIA. If you look at the SoFIAs at the end of this year with 3G integration and then a big first half of next year with LTE integration. Remember those products weren’t even on our roadmap six or seven months ago. So, that shows that we’re acting quickly integrating and bringing those products to production.
Then after that is, as Stacy said earlier, Broxton, which is our internal 14-nanometer product. That’s targeted towards the mid to high level. And as we bring that into the second half of 2015 and into 2016, there will be various levels of integration on that.
So, when I look across this, those are the milestones I look at, because those are what drive that along with just the basic cost reduction capabilities we talked about for this year as we get out of this contra revenue into 2015. Those products then place us firmly in leadership capability from the low end to the high end with integration. And those are the milestones to me that will lead to profitability long-term.
Stacy J. Smith – EVP and CFO: And I’ll just add to that, I think you left it off because it was so obvious, but the 40 million tablets is one of the things I see Brian just laser focused on. And as we’ve talked about before, it gets us into the 15% to 20% range of the total tablet market.
It gives us a big enough footprint that we start to see people developing on our architectures. It becomes a self-sustaining ecosystem as we’re bringing these other products to the marketplace. So, don’t lose sight of that one, Blaine.
Stacy Rasgon – Sanford C. Bernstein & Co: I wanted to dig a little bit into the mobile and wireless group. So, you’ve talked a bit about having I guess developing leadership products, leadership position in order to drive profitability. We’re looking at this right now, though. So, we had the business fall more than 50% sequentially.
You have your 7160 which is shipping but apparently it’s not really driving much volume. We have the 7260 which is forthcoming, but we really haven’t heard much about design wins. And you launched at Mobile World Congress without really saying very much there.
We have SoFIA coming, which absolutely is integrated, but it’s being made at TSMC for the next few years which means you lose any potential benefits from your own process technology. And you would seem to be well behind what the market leaders are shipping in terms of 4G.
Just what should we be looking for and over what timeframe should we be looking for, for the ramp? I guess what I’m asking is, how can we get confidence that we’re going to actually see the revenue ramp that is built into the short-term expectations for this year and then going forward, to make sure that you can actually get a profitable business, which obviously would be driving quite a bit of upside to where the models are today?
Brian M. Krzanich – CEO: Remember, the 7160, we gave you a series of products that it’s shipping in. And on the 7260, which will qualify this quarter, we gave you a list of OEM partners that have committed to that platform. So, we’re fairly confident that the ramp in the second half of this year will continue on that product. And it is a leadership product.
SoFIA, you’re right, is built at TSMC. We went for speed and integration. And it was simply quicker to get to market with a competitive product from both a price and performance. We actually believe that the IA core will give us better performance than the competition. And the competition is at that same node at TSMC. And it’s 3G at the end of this year and LTE in the first half of next year.
We then told you that in the second half of next year — and again, we’re debating whether it’s the second half or the first quarter of 2016, but we’ll move all of that internal on to 14-nanometers. And it’s really based on other products that we have moving in at that time and just overall resources all right.
We had a lot going on — the ramp of Broadwell, the ramp of Skylake in the second half of next year, plus bringing these products inside. But I’m very confident that when you do that, plus you add in Broxton, which is targeted towards the mid to high range and again is integrated with leading-edge LTE.
And don’t forget we have a roadmap of LTE products beyond the 7260 that continue the level of carrier aggregation and product leadership. We’re fairly confident that we can continue to grow this business and turn it profitable over that time.
Stacy J. Smith – EVP and CFO: And let me just comment on the question about the long-term profitability. It sounds basic, but it really stems from our manufacturing leadership. If we’re two years ahead of the rest of the industry, and extending it gives us the ability that, as we target our products into the right space from a power standpoint, we will have power advantage or performance advantage and a cost advantage.
That really is our strategy playing out. You’re seeing the first products hitting that theme over the course of this year and into early next year. Bay Trail is a really good product. For the high end of the market, you’ll see products coming into the market that are more targeted at the mid-range and lower end of the market next year. But that’s how the strategy plays out.
I’d say for 2015, I would expect to see reduction in the loss. Not profitability, but a reduction in the loss will feel pretty good when we get there and then we’ll keep driving towards the long-term profitability goal.
Stacy Rasgon – Sanford C. Bernstein & Co: I’d like to drill in a bit more. I’m actually into the tablet efforts now. So, we’re obviously subsidizing. And I get the idea of reducing BOM cost in order to make up for the deficiencies with the idea being that you can drive improved product set down the road.
But at the same time, if you look at the tablet market, where it is today, you’re obviously not going to be going after Apple any time soon. Maybe there’s a little bit of volume at Samsung. But I mean if you take those guys out, 75% of what’s left is systems that are $250 and below, where your competitors are shipping quad-core chips for much less than $10.
I’m curious to know what kind of economics and pricing you see from that market long-term. And are the — I guess the total revenue pool and profit pool that’s available, even if you were to succeed at your goals, why does that make it a worthwhile effort to actually go after? Or is this simply, as you said, strategic? Is this an attempt to limit further penetration of tablets into the core market?
Brian M. Krzanich – CEO: You’ve asked a question that has multiple questions built into it. But let’s start with what we told you was we’ve got multiple OEM partners building tablets and phones on our products. And we gave you Asus and Dell and Lenovo and Samsung on those products.
If you look at the tablet business overall, it’s broken up into a series of segments. And you’re right; there is a large percentage of them that are $250 and below. Products like SoFIA are specifically designed for that segment.
And our dual-core SoFIA already performs quite well against quad-core systems. As we move into next year, we’ll bring quad-core SoFIA-based products out, as well. And so we believe that we can stay very cost competitive and have a performance leadership.
Remember, Intel has two assets. We have our silicon technology, but we also have our architecture. And one of the things an OEM gets when they build with Intel technology is that they can go into any OS and they can build a single platform and move that on to Chrome, on to Android, on to Windows. And that’s a very unique capability that we provide to OEMs for flexibility.
So, we believe with a product like SoFIA, as we bring that into the market next year, we can absolutely compete in those spaces and make money. You’re probably not going to make as much revenue dollars and as much margin dollars as the PC business, but we think this is still critical. And it’s critical for a variety of reasons. Part of it is simply the scale. You want to have those units. You want to have a presence in all areas of computing.
And the second one is developer attention. You want developers creating new products, doing innovation on your architecture. This is a space that’s got innovation. We are going to bring some of that innovation to this market. You’re going to see some tablets as you go into the end of this year.
We showed them at CES, some of the highlights where you have 3D cameras, you have perceptual computing capabilities for gaming. All of those kinds of things can change the tablet market, along with the PC market.
So, we believe that we can bring a lot of the innovation that we do in the PC down into the tablet space. And again, that keeps the developers developing and interested in our platform. I think for all of those reasons, we want to be in this space and we will be in this space from now on.
Stacy J. Smith – EVP and CFO: That was very complete, but we don’t fear the low end of the market. You look at how we played out in PCs. You can drive a lot of unit growth by participating in PCs now that are $199 to $250. We can have the cost structure because of our manufacturing lead to participate nicely there. And you see that as markets mature, they also segment.
And so we have look, you look at our PC business, we have great demand and profitability in core I7s and it spans down to Bay Trail at the Atom segment of the market. So, it’s a misconception to think that we only want to play at the high end. Our manufacturing leadership can give us the cost structure to play profitably at the low end, as well.
Mark Lipacis – Jefferies: Brian, when you talk about the 40 million unit bogey on tablets this year, could you go through the taxonomy of that a little bit? To what extent do you think this is Windows versus Android? And what’s the class of product you think will represent the mode or the mean? Like where do you think your sweet spot is going to be this year on tablets?
Brian M. Krzanich – CEO: Our mix of OSs reflects pretty much what you see in the marketplace. So, I think, depending on how you look at it, it’s probably something on the order of 90% Android, 80% Android, 10% to 20% Windows.
Our percentages look very much like the marketplace. So, if Windows continues to grow and gain traction I think our percentage would just align directly to that. So, you can — don’t separate what we ship from what’s basically in the marketplace. We’re leadership capability on all of the OSs now.
As far as what is the price point, again, it reflects fairly close to what the marketplace is. You see us in systems below $100 now. The majority of the systems are say $125 to $250, somewhere in there. And then you see us in some of the upper end systems, $250 to $400. And so — but the majority is in that — I’d call it, $125 to probably $250 range.
Mark Lipacis – Jefferies: And then as a follow-up, did you discuss, do you expect to have the Android tablets ramping in volume this quarter? Are we going to be — should we expect to see the Bay Trail Android products at Computex this year? When do we really see the material ramp in the Android products?
Brian M. Krzanich – CEO: Sure, absolutely. You can go out to the store today and buy an Android — in fact, I’d love you to go buy one of the 40 million we’ll sell. But, yes, you can buy Android. It continues to ramp through this quarter. At Computex, we’ll show a series of Android and Windows-based tablets. And they just continue to ramp through this year. But they’re on shelves today. I saw them in the store this weekend.
Stacy J. Smith – EVP and CFO: The majority of the 5 million units, for example, are Android. Just as Brian said, it more or less follows the distribution between Windows and Android.
Despite of the Intel video of a year ago getting totally new meaning this week:
- Microsoft BUILD 2014 Day 1: consistency and superiority accross the whole Windows family extended now to TVs and IoT devices as well—$0 royalty licensing program for OEM and ODM partners in sub 9” phone and tablet space [‘Experiencing the Cloud’, April 2, 2014]
- IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
the stock market has just turned negative about the future of both companies:
An explanation for that:
- Intel was upgraded by a Piper Jaffray analyst, who cited a slowing PC market decline.
- The PC market, sans Mac, has been on a decline that hasn’t ended, despite people like myself predicting it would have bottomed by now.
- I sold my Intel shares for the time being and am grazing greener pastures.
By now, we all know some of the questionable points about Intel’s (INTC) business. In the past, I’ve written about the company being a little slow on the uptake when it came to mobile and tablet sales. Most recently I’ve questioned the company’s vision for jumping into cloud computing with a major investment and abandoning their in-house Hadoop project, ultimately leading to a major waste of money and resources.
First things first; I sold out of my Intel long position the other day, not necessarily discounting the company to be a long-term hold again at some point in the future. I needed the capital for other purposes, evaluated the many positions in my portfolio, and found the most unease about Intel – so, I sold – for now.
And, sure enough, right after I sold, Seeking Alpha came out and reported that Piper Jaffray came out and upgraded the stock:
- As part of a change of coverage for chip stocks, Piper is upgrading Intel to Overweight, and downgrading Broadcom (BRCM) to Neutral.
- The firm thinks Intel will benefit from stabilizing PC sales, and is worried about Broadcom’s mobile customer concentration (presumably with Apple and Samsung).
- IDC still expects PC shipments to fall another 6% in 2014. But Y/Y decline rates have been narrowing in recent quarters.
- OTR Global recently reported Broadcom’s 3G baseband chip sales to Samsung have fallen sharply. Samsung has also taken steps to increase its use of in-house Wi-Fi and Bluetooth chips, though that hasn’t stopped Broadcom from continuing to secure combo chip design wins.
- Apple bought Bluetooth chipmaker Passif Semi last year (possibly for iWatch R&D), but hasn’t yet done anything to suggest it’s working on Wi-Fi chips.
When I dug a little deeper into the reasoning behind the upgrade, one thing perked my ears up. Piper is coming out and assuming that the PC market is going to continue to slow and then eventually bottom. I thought this very same thing six months ago. Since then, I’ve continued to watch the PC market decline – albeit slower now – but it has yet to hit a bottom.
Again, Intel’s biggest friend here has been Mac, which has been able to buck the overall trend of the PC market and continue to sell well. Intel leveraging its relationship with Apple (AAPL) at this point remains a key factor in their success.
As the main constituency of Intel products travel through the sales of PCs, this continues to remain a point of unease for Intel. Additionally, Piper is seemingly betting on a flawless execution and growth of Intel’s Quark chipset which certainly is possible, but remains to be seen at this point.
Gartner’s numbers, shown below, continue to show a decrease in PCs for 2015, and an increase in both tablets and mobile – where Intel still does not have a steady foothold.
(click to enlarge – source)
Further, the headlines surrounding the market that even I predicted would have stabilized by now, continue to look ugly. cnet reported:
PC sales will continue to nosedive this year as more consumers scoop up mobile devices, says a new report from Gartner.
Global shipments of personal computers will total 276.7 million in 2014, Gartner forecast on Thursday, a 6.6 percent drop from last year. On the flip side, tablet shipments will jump by 38.6 percent thanks in part to greater demand in regions outside North America.
But the number of people replacing their aging PCs with tablets is actually expected to decline.
But what about globally, you ask? I asked the very same thing – same uneasy headlines, different countries. We continue to see reports, like this one out of Taiwan, claiming that PC sales are poised to decline:
Total PC sales in Taiwan are poised to decline for the fourth consecutive year, as consumers continue to favor mobile devices that are less expensive than, but as productive as, their pricier counterparts, International Data Corp [IDC] forecast yesterday.
National PC sales are expected to fall by 5.1 percent to 2.55 million units this year, following a 15.6 percent fall last year, the market research firm said in a report.
Desktop computers are projected to account for 60 percent of total PC sales this year, with notebook computers making up the remaining 40 percent, the report said.
Last year, desktop and notebook sales in Taiwan reached 1.68 million and 1.01 million units respectively, it added.
But when are we going to hit the coveted bottom that we continue to talk about? It is coming, possibly, but it sure isn’t here yet. And, as long as these sales continue to decline, Intel remains at a vulnerable point as a company. Especially with the questionable vision they have shown of late.
Again, this data [dated March 5] from IDC is once again suggesting that PC sales are going to decline more than we expected this year:
Shipments of new personal computers, most of them equipped with Microsoft Windows (MSFT), will decline more in 2014 than thought a few months ago, researcher IDC said Tuesday.
IDC said that PC shipments will drop by 6% from the year before to approximately 296 million, a smaller number than it forecast three months ago, when it said global shipments would decline 4% in 2014.
Last year, shipments contracted by 10% compared to 2012, dropping to about 315 million new PCs.
IDC revises its numbers quarterly, said Rajani Singh, an analyst with IDC, who pointed out that as the market changes, the company modifies its forecasts, sometimes up, sometimes down.
Even though I thought their new incentive-based pay program was a good idea, there were many that disagreed with me and thought it was bad for business. You could say the same, again, about the company’s recent foray into cloud computing. People ask, “Is it too little, too late?” Why does it seem like Intel is just throwing everything against the wall to see what sticks?
(click to enlarge)
Do I think Intel is an absolutely horrible stock to be in for the long-term? Of course I don’t. It pays a dividend, has a good balance sheet, and is going to be around for many years to come. Do I think Intel is ripe for a short to mid-term trade? Absolutely not. I think there’s still work that needs to be done at this point before we see Intel push up towards $30/share and, thusly, I made my decision to sell my Intel shares for the time being and enter an Intel holding pattern.
Best of luck to all investors.