Is Intel Limiting Itself?

It is plainly obvious that Intel (NASDAQ: INTC  ) feels more comfortable in the tablet market than it does in the smartphone market. Why is that? It comes down to the fact that a smartphone is first and foremost defined by the quality and capabilities of the cellular radio within the device. While Intel has been investing heavily in cellular/wireless for quite a while via the Infineon Wireless acquisition, the company has yet to prove itself with a true leadership modem.

Intel's modems are getting better
Intel just launched its XMM 7160 LTE, which seems to be a fairly decent Category 4 LTE modem. It lacks a lot of the bells and whistles that a modern Qualcomm modem sports, and it's fairly limited in what networks it can be on. For example, 7160 lacks TD-LTE, TD-SCDMA, CDMA, and LTE-Advanced support, putting it significantly behind Qualcomm's MDM9x25 baseband.

However, Intel's next-generation baseband scheduled to ship in the first half of this year known as the XMM 7260 actually adds quite a bit of missing functionality. It sports TD-LTE, TD-SCDMA, and even supports Category 6 LTE-Advanced. For the most part, XMM 7260 looks extremely competitive with the next-generation baseband that Qualcomm announced. Well, except for one little thing: lack of CDMA.

Without CDMA, Intel will be locked out of many U.S. carriers
A rapid move toward LTE-only networks should begin to play itself out in late 2014/early 2015. And while the move to voice over LTE, or VoLTE, should also begin to play out this year, it is clear that there will still be a need for CDMA networks such as Verizon (NYSE: VZ  ) , particularly in the U.S., for quite some time.

Marvell (NASDAQ: MRVL  ) and Intel don't support CDMA. In fact, Marvell's CEO had this to say in an interview with EETimes about why his company isn't going to support CDMA:

In an impromptu interview with EE Times at CES, Sehat Sutardja, CEO of Marvell, confirmed that Marvell's multimode LTE solution does not include CDMA2000. It's because "that standard is going away anyway," he said. Sutardja referred to Verizon Wireless's announcement in which the carrier said it is to sunset 2G and 3G CDMA networks by 2021.

Interestingly enough, fast-growing mobile chip giant MediaTek has made it quite clear that it does plan to support CDMA. It says CDMA will be around for quite some time and will be necessary if MediaTek wants to gain traction in the U.S. and other markets that require the standard. While this standard does eventually go away, this doesn't mean that there's not plenty of money to be had selling products in that space in the meantime.

Not a deal breaker, but...
At the end of the day, lack of CDMA support will keep Intel-based smartphones off of Verizon and Sprint, but it will be able to sell into phones intended for AT&T (NYSE: T  ) and T-Mobile, which -- given that Intel's U.S. share is precisely zero -- isn't a bad gig at all. That said, one does have to wonder if this move will end up limiting Intel's nearer-term smartphone ambitions, particularly as handset vendors would have to build entirely different variants of their phones -- should they choose to use Intel -- for the GSM carriers and the CDMA carriers. 

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