A while back, Intel (NASDAQ:INTC) and longtime PC partner ASUS announced the ZenFone series of smartphones. The ZenFone 4, 5, and 6 all sported older generation Clover Trail+ Atom processors along with Intel's 3G modems. Around the same time as this family of phones launched, Intel announced that it had signed a multiyear, multidevice strategic relationship with ASUS for a whole family of smartphone and tablets. Interestingly enough, according to VR-Zone China, ASUS' next smartphone -- an LTE-capable 4.5-inch device that looks similar to the Intel-powered ZenFone line -- will be powered by Qualcomm (NASDAQ:QCOM) silicon.
It's that integration
The low-cost, LTE-capable phone from ASUS will sport a low-end Qualcomm Snapdragon 400. This chipset has proven exceptionally popular and has powered everything from Samsung's Galaxy S4 Mini to hordes of white-box smartphones in Asia. It is not a particularly zippy chip, sporting four low-end ARM (NASDAQ:ARMH) Cortex A7 cores, but it is highly integrated and comes with a Qualcomm LTE modem as well as 802.11ac connectivity built right onto the processor.
What does Intel have to offer in this space? Well, for a low-cost LTE product, ASUS would have two main options:
- Intel's prior-generation 32-nanometer Clover Trail+ platform paired with discrete connectivity combo and Intel's XMM 7160 modem; and
- Intel's latest-generation 22-nanometer Merrifield platform paired with discrete connectivity and Intel's XMM 7160 LTE modem.
With the Qualcomm processor, ASUS gets a lot of value integrated onto a single chip. With the Intel platform, ASUS needs to not only buy Intel's processor, but it also needs to buy a separate LTE modem and a connectivity combo chip. Not only does this increase the printed circuit board footprint, but it also likely impacts power consumption to some non-trivial degree.
Why is this? In Qualcomm's case, both the Wi-Fi and cellular modem are built on the lower-power 28-nanometer LP process. In Intel's case, the discrete modem as well as the connectivity combo are likely built on the aging 40-nanometer process for Merrifield, although for Moorefield the situation gets a lot better as the modem is built on 28-nanometer. That said, in order to fully capture the manufacturing lead that it has, Intel needs all of the performance/power sensitive components in the platform need to be built on the latest manufacturing technology.
Do you now see why Intel needs SoFIA?
One of the first "big" moves that Intel's new CEO, Brian Krzanich, made was to put a product known as SoFIA on the smartphone/tablet road map. This is a TSMC-built 28-nanometer high-K/metal gate (this is the faster of the two 28-nanometer mobile offerings from TSMC) part that integrates the cellular modem into the main processor and the connectivity into the RF transceiver.
While the apps processor doesn't get the benefit of Intel's latest-and-greatest process technology, the entire platform should be much cheaper and potentially lower power relative to the Merrifield (22-nanometer) + XMM 7160 (40-nanometer baseband/65-nanometer RF transceiver) combination. This would finally allow Intel to compete on even-footing for mass-market smartphones.
Intel's SoFIA is a game changer, but this could be even bigger
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Ashraf Eassa owns shares of ARM Holdings and Intel. The Motley Fool recommends and recommends Intel. It owns shares of 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.