Intel Challenges Qualcomm With Its New Modem

Intel (NASDAQ: INTC  ) has an impressive kit on its hands with the XMM 7260 category 6 LTE-Advanced modem, complete with 300 Mbps downlink and 50 Mbps uplink. It's quite a step up from Intel's prior-generation LTE modem, the XMM 7160, which was late, was missing tons of features, and fell short of market leader Qualcomm's  (NASDAQ: QCOM  ) offerings. And while the XMM 7260 looks fantastic, it appears Intel isn't taking the foot off the pedal with its next generation of modems.

Intel gets a slight timing advantage ...
One of the more impressive parts of the XMM 7260 has simply been the timing of the release of the modem. While the XMM 7160 was originally intended to ship with Clover Trail+ in very early 2013, it began shipping in August of last year and still hasn't found its way into a shipping smartphone. However, the 7260 -- a follow-on that implements the latest bells and whistles -- is on track to ship this quarter.

Intel's LTE modem lineup grows. Source: Intel. 

While Qualcomm has also announced a modem with a similar feature set (Qualcomm still has an edge thanks to CDMA support and is probably lower powered by virtue of being built on Taiwan Semicondictor's (NYSE: TSM  ) 20-nanometer process, against TSMC's 28-nanometer process for Intel), Intel will be shipping in Q2, with Qualcomm looking as though it'll be shipping at some point during the second half of the year (probably early Q3). A slight victory is still a victory.

... does Intel extend this lead in 2015?
According to a roadmap that Intel presented at the Intel Developer Forum in Shenzhen, China, the company plans for its next-generation LTE-Advanced modem to hit the market in 2015. This will be a category 7 LTE-Advanced modem (300 Mbps downlink/100 Mbps uplink) built on an as-of-yet undisclosed manufacturing technology. It's likely that Intel will be building this modem on its 14-nanometer manufacturing process at its in-house manufacturing plants.

Now caught up with Qualcomm, Intel looks to stay on the cutting edge of modem technology. Source: Intel. 

Now, Intel's modem designs are already well known for pretty solid efficiency, even relative to peers on similar manufacturing technology. On the 14-nanometer process, not only does Intel get a pretty sizable density advantage over its peers, but it will also have a modem that offers significantly lower idle power and active power by virtue of the second-generation FinFET transistors facing off against 20-nanometer planar transistors. For power- and battery-life-sensitive mobile devices, this is a pretty significant advantage that is likely to play itself out in two ways:

  • Integrated designs -- in an apps processor integrated with a modem on the 14-nanometer process, Intel could have a pretty significant wattage performance lead with its platforms.
  • Discrete modems -- many high-end phones prefer to use discrete cellular modems, as the app processors in these designs are usually focused on delivering as much performance as possible (a prime example of being Apple's iPhone). Intel's discrete modems will pair well with its own high-end processors, and Intel has a better shot of winning modem sockets in designs like the iPhone and Samsung Galaxy phones.

If this thesis is correct, Intel should be positioned pretty competitively in phones for 2015 (particularly if the 2015 modem is built on 14-nanometer), which opens up a pretty solid long-term growth opportunity for the company.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 03, 2014, at 2:26 PM, fearandgreed2005 wrote:

    Nice article. It looks like Intel will grab tablets in 2014 and phones in 2015. They already have the data centers and the PCs. I do not see an answer to the 14nm FinFET coming anytime soon. I am really curious as to how Samsung and Apple are going to respond if there is no alternative to Intel's 14nm by end of 2015. TSMC's 20nm looks to be a bust and Samsung is also struggling. I am very long INTC.

  • Report this Comment On April 03, 2014, at 2:48 PM, techy46 wrote:

    Intel's mobile pieces and tick tock strategy are starting to become visible.

  • Report this Comment On April 04, 2014, at 2:16 AM, junctionscu wrote:

    Ashraf, do you know whether a company like Intel stands to make more money with a discrete modem design win versus an SoC / apps processor? Wouldn't it be interesting if Intel makes more money selling modems than it could selling SoCs?

  • Report this Comment On April 04, 2014, at 7:32 AM, grnftr wrote:

    It could be another situation like where TSMs 28 is more efficient that Intels 20

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