Intel’s IoT products: A Rose by Any Other Name Would Smell as Sweet

 When the term IoT (Internet of Things) came into vogue a year or two ago, chip companies raced to rename many products in their existing portfolio as IoT devices.  Intel was no exception.

Intel’s rapid growth in its IoT product line has befuddled many. What IoT products does Intel actually make?  Well, the company’s IoT division was previously known as the “Embedded Products Division.” The rapid revenue growth was really based on renaming the existing division. Intel’s embedded products started out many years ago as “any Pentium-based product that didn’t go into a PC.” But now, my guess is that Intel’s IoT products are customer-defined ASICs and pre-defined modules enabling customer-specific designs, based on X86/Atom cores and sensors.

Intel’s 2nd Entry to the Cellphone Business

My last newsletter briefly told the history of Intel’s first ill-fated first entry into the cellphone chip business. Now, I’ll discuss Intel’s latest thrust (is that the proper word?) into that business.

One should also note that about 10 years ago, Intel turned down a proposal from Apple to supply chips for what was to become the iPhone.  After all, at that time Intel was already supplying chips for Apple’s MAC products.  But, Intel management under Paul Otellini decided that it didn’t make economic sense, since the iPhone was not yet introduced and Apple set a price that Otellini said was below their forecasted cost.  Of course, Intel didn’t understand the volume implications that would drastically lower future costs. So, let’s step forward a few years:

Intel’s second entry in the cellphone business began in August, 2010, when it acquired the wireless assets of Infineon Corp. for $1.4 billion. Infineon’s wireless business was booming, after all, its 2G/3G modems, based on CEVA DSP cores, were in all of Apple’s early iPhones. Perhaps in anticipation to the purchase of its wireless assets by Intel, a couple of months earlier Infineon purchased a small LTE modem startup in Dresden, Germany named Blue Wonder Communications (named for a famous blue bridge near Dresden). Blue Wonder had been developing an LTE-only modem based on Tensilica MCU cores (several implemented as DSPs). The Infineon (and later Intel) plan was to bond the acquired Tensilica-based LTE modem on to the CEVA-based 2G/3G modem.

That was not easy, since it took another three years to produce a working multimode LTE modem, the XMM7160. I had informally commented to Intel management at the time that they would be better served to simply build on to the existing CEVA platform, but that idea was brushed aside since I was told, “It’ll take us another three years of work to field an LTE modem with that approach.” But it was late 2013 when Intel got its first “socket” for the XMM7160: Samsung’s Galaxy Tab 3 (10.1) tablet. As a side note, Renesas Mobile also had part of the Tab3 tablet socket with its own multimode LTE modem (later sold to Broadcom and then their LTE modem product line was later cancelled due to lack of available sockets).

Note that over that same time period, China-based HiSilicon (Huawei’s chip subsidiary) developed its own multimode LTE modem based only on Tensilica cores (no ISA incompatibilities with 2G/3G operation, of course).

But, during 2013 Intel was shipping 2G/3G modems based on the evolved Infineon modem. These went to 2nd-tier cellphone companies like Malaysia’s JOI Phone 5, China’s Lenovo K900 and India’s XOLO X1000.

At MWC in February 2014 Intel introduced its second-generation XMM 7260 multimode LTE modem, when paired with Intel’s SMARTi 45 RF transceiver was capable of Cat 6 LTE-A carrier aggregation. The company had plans to pair the modem with various low-power X86 application processors, like dual-core Merrifield and later quad-core Moorefield to be competitive with Qualcomm’s Snapdragon 800 product family.

Although Intel’s slim LTE basebands made it into several low-end tablets, the company had its first real cellphone success in the popular ASUSTeK Zenfone2 smartphone, boosting their standalone application processor and modem shipments and finally making them a player in the LTE smartphone market. However, the CDMA and TD-SCDMA-based (China Mobile) ASUS ZenFone’s were exceptions, relying on Qualcomm instead. Unfortunately, ASUSTeK later cut its orders to Intel because of Intel’s delay in shipping its integrated baseband/application processor (SoFIA) LTE chip, and Qualcomm and MediaTek took up the slack.

In May 2014, Intel announced a partnership with China-based Rockchip aimed at producing a quad-core SoC with Intel’s 3G modems for the China market by the middle of 2015. Note that in 2014, Rockchip was the leading supplier of standalone application processor solutions to Chinese white-box tablet manufacturers as well as some significant OEMs such as ASUS, HP and Toshiba.

At MWC’15, Intel announced its 3rd-generation LTE modem, the XMM 7360, which was to offer 3x carrier aggregation (for up to 450 Mbps downlink) in the second half of 2015.  The 7360 also offered support for 29 LTE bands and 5-modes, including TD-SCDMA (clearly for China Mobile) and Dual-SIM capability (also popular in China).

On October 1, 2015 Intel acquired the CDMA modem assets of Via Technologies, enabling Intel to eventually field a true “World Phone” modem.  This is important if some Intel modems are to be universally employed.

At MWC’16, Intel announced the XMM7480 LTE modem featuring 4x carrier aggregation and 256 QAM (a nice high-speed feature when you are near a tower) and a separate AmpTrack envelope tracking chip, apparently leveraging a CEVA DSP core to assist the Tensilica-based LTE modem. The 7480 now serves a record 33 LTE bands and is said to be sampling in the second half. There’s no sign of CDMA incorporated into the product line yet.  According to an Intel spokesperson, “We should be seeing design wins by the end of 2017 or early 2017.” Sounds like confidence in getting in to some of the iPhone 7s due to ship about that time.

Without a major volume socket like the iPhone 7, there’s no reason for Intel to continue in the cellphone business. But, based on hints from Intel, Qualcomm and Apple’s suppliers in both China and Taiwan, it’s a virtual certainty that Intel will get its slim modem in some percentage of Apple’s upcoming iPhone 7s.

Shameless Plug

Our newest market study, ““GLOBAL SMART DEVICE MARKET 2016” provides a detailed analysis of smartphone, tablet and cellular IoT modem markets and LTE subscribers by global region.

DSP-may2016The overall market for smart devices is dominated by smartphones, which have saturated in China, North America and Japan…causing global demand to slow from double digit growth to only 5-6% CAGR through 2020. However, the market growth in emerging regions is much higher. In contrast to China, which had negative smartphone growth in 2015, the emerging SE Asia region, Middle East/Africa region and India grew at rates of 31%, 32% and 47%, respectively.

The market continues to evolve, as new operators complete their LTE networks which they began through aggressive subsidies, transitioning their 2G and 3G users to 4G LTE. This led baseband modem chips to grow 90% to 533 million 4G LTE devices in 2015.

The 305-page report’s coverage is wide and deep. It is moderately priced at only $2,500. For a more detailed description as well as the extensive table of contents please click here.

As always, I encourage your feedback.

Will Strauss
President & Principal Analyst
Forward Concepts
wis@fwdconcepts.com

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