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With the Lenovo-Motorola deal essentially done, and with Intel's (NASDAQ: INTC ) announcement of a multi-year, multi-device partnership with Lenovo, could Intel wind up winning the next-generation Moto X? The answer to this question isn't so simple. Intel could very well win some models of the Moto X. But because Intel's modems do not offer support for CDMA, some, if not all, variants would necessarily be Qualcomm (NASDAQ: QCOM ) -powered.
CDMA is on its way out, but it's still here for now
CDMA, and in particular, CDMA2000, is a family of 3G standards that use a channel access technique known as code division multiple access. Some carriers, such as Sprint and Verizon, use CDMA, while GSM carriers AT&T and T-Mobile (NYSE: TMUS ) do not. While Verizon and others have made it crystal clear that CDMA will eventually fade into irrelevance, that won't happen until LTE-only networks are the norm. CDMA will be around for many years to come.
While Intel's latest XMM 7260 LTE-Advanced modem supports all of the latest and greatest features required for a high-end device, one thing that it is still missing is support for CDMA -- and from conversations with Intel's mobile group, it is clear that Intel has no intention of supporting the standard. This means that even if Intel were to actually win such a design, it would need to persuade Lenovo/Motorola to go the extra mile to build separate SKUs -- one with a Qualcomm platform and the other with the Intel platform. This isn't a huge problem, however, as Motorola put out multiple SKUs of the original Moto X, depending on the wireless standard supported.
How likely is such a win?
The first Moto X was launched on Aug. 23, 2013. Assuming a product life cycle of about a year, we're looking at a launch time frame for its successor at around the same time, implying a launch in the mid- to late third quarter. Given that Intel has confirmed that Merrifield devices will roll out in Q2 and that Moorefield devices are likely in early Q3, the time frame for Intel to win this particular design actually works. That said, this in itself is not enough to actually confirm the win. But given that Lenovo now owns Motorola -- and that Intel and Lenovo just signed a multi-year deal -- it's not at all far-fetched. Still, it's probably not something to bet money on.
With that in mind, if Intel were to win the GSM versions of this product, this would represent a pretty large validation of Intel's new mobile processors, even if it doesn't translate into something material on the revenue side of things -- remember, the Moto X didn't exactly sell like hotcakes. A successful win for Intel here would likely attract the attention of additional handset vendors and help alleviate some of the concerns associated with switching to an Intel-based chip.
The Lenovo-Motorola combination is extremely interesting from the perspective of an Intel investor, particularly as both Apple and Samsung seem to be out of reach at a full platform level for now, since both design their own apps processors. If Intel can land its chips in successful designs, and if it can ultimately demonstrate leadership in power, performance, and integration, then the mobile world will be Intel's oyster. Things should get very interesting over the next 12-18 months.
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