Intel’s Best Competitive Edge Is…Infineon?

While Intel's success in smartphones is limited today, its close-second position in cellular basebands could prove the ultimate long-term competitive differentiator.

Mar 11, 2014 at 8:00PM

Every one of the "major" semiconductor companies vying for mobile processor dominance has something that it's really good at – it's "secret sauce." Historically, Qualcomm (NASDAQ:QCOM) has been known for its modem/RF prowess and Intel (NASDAQ:INTC) is known for being a world-class CPU designer. However, in the mobile system-on-chip world, a company needs to deliver a product that is best-in-class across the board to get noticed. Interestingly, it seems that everybody these days can design/license a competent CPU and GPU, leaving the main differentiator in smartphone processors to be the modem.

Intel is solidly No. 2 in modems today
There's no denying that Qualcomm is the top cellular modem vendor today and, as an added bonus, is also the strongest mobile SoC vendor. Across the various IPs necessary to build a SoC, Qualcomm is either No. 1 or No. 2 (depending on the benchmark and who you listen to), but it is so consistently good across the board that its SoCs are the choice for just about every "hero device" and even its mid-range and low-end solutions continue to aggressively take share against competitors.

However, a strong No. 2 is beginning to emerge in the form of Intel. Sure, MediaTek is the No. 2 vendor of mobile system-on-chip products by revenue (and Intel's share is negligible), but from the investment level Intel has been committing to this over the last several years and from the features found in Intel's recently announced XMM 7260 LTE-Advanced solution, it's clear that Intel is the only "real" competitor to Qualcomm at the high end of the modem space today. This is a long-term advantage that cannot be ignored as smartphones, at the end of the day, live and die by the quality and features of the modem.

Modems are the best way to differentiate
It seems that just about anybody can build a competent application processor – just license stock ARM Holdings CPU IP, use either ARM/Imagination Technologies graphics IP, and then build up the various IP blocks (imaging, video, camera, etc.) and – presto! – you have an applications processor. However, for this product to have value inside of the much more lucrative smartphone market (which is, again, driven by the modem), it needs to have a top-notch integrated modem (or, at the very high end of the market, a platform paired with a top-notch discrete modem).

This is where Intel and Qualcomm stand alone. While Broadcom (NASDAQ:BRCM) has announced that it plans to sample a category 6 LTE-Advanced modem during the middle of 2013, Intel claims that devices with its own category 6 LTE-Advanced modem will be on the shelves by Q2 2014. Qualcomm, too, has been sampling its next generation 20-nanometer MDM9x35 since the beginning of the year and plans to have availability during the second half of the year (iPhone 6, anyone?). Interestingly enough, Intel may actually beat Qualcomm to market with a category 6 LTE-Advanced modem.


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Ashraf Eassa owns shares of Broadcom, Intel, Imagination Technologies, and Nvidia. The Motley Fool recommends Intel and Nvidia. The Motley Fool owns shares of Imagination Technologies, Intel, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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