1 Surprising Fact About the Samsung Galaxy Alpha

The Samsung Galaxy Alpha launched recently, and it packs something surprising inside.

Aug 13, 2014 at 4:31PM

Samsung (NASDAQOTH:SSNLF) unveiled its next generation Galaxy Alpha smartphone on Aug. 13. Samsung looks to be positioning the handset as a mid-range, "premium" device. While much about the phone was known prior to the launch, the official specifications of one of the variants was unexpected.

A big win for Intel

While the North American variant of the Galaxy Alpha contains a Qualcomm (NASDAQ:QCOM) Snapdragon system-on-chip, the international version -- according to AnandTech -- includes a Samsung-designed applications processor, and an Intel (NASDAQ:INTC) XMM 7260 LTE-Advanced cellular modem. 

Those following Intel may be aware that the financial results of its mobile division have been a significant drag on what is otherwise a very strong core business. Just how bad is it? It lost more than $1 billion last quarter on sales of just $51 million. 

A substantial portion of that year-over-year decline in Intel's mobile revenue has been, according to the company, due to a large falloff in the sales of its 2G/3G cellular modem business. Though Intel had expected this decline to be offset by the ramp of LTE products, these products were a bit late to market, pushing out that ramp by several months. 


Intel's original LTE ramp plan. Source: Intel. 

However, with Samsung formally announcing that the XMM 7260 will provide cellular connectivity for its Galaxy Alpha, it seems that Intel's mobile business is set to see much improved results during the coming quarters. 

Why is this significant?

This announcement is significant in a number of ways. First off, it appears that Samsung is still either unable or unwilling to equip one of its more important handset designs with a Samsung-designed modem. This signals that Qualcomm and Intel -- two key vendors of stand-alone modems -- may be less at risk of being displaced by internally designed solutions than it had originally seemed. 

Additionally, it seems that Samsung is becoming more comfortable with using Intel's stand-alone modems, even in premium devices. Prior Intel modem wins at Samsung have been models of relatively lower importance, like the Galaxy K Zoom, and the international variant of the Galaxy S5 mini. 

Not all Galaxy Alpha models are created equal

It's also worth mentioning -- and this is the real shocker -- that the Intel modem used in the international variant of the Galaxy Alpha actually supports higher LTE-Advanced speeds than the modem block found inside of the Snapdragon 801, which powers the North American version of the phone. The MDM9x25 inside of the Snapdragon 801 supports up to category 4 LTE-Advanced, which means download and upload speeds are 150 megabits per second and 50 megabits per second, respectively. 

The XMM 7260 inside of the international version of the Galaxy Alpha, on the other hand, supports 300 megabits per second download and 50 megabits per second upload speeds -- similar to Qualcomm's higher end MDM9x35 stand-alone modem found inside of the Galaxy S5 Broadband LTE-A.

Is Intel finally catching up with Qualcomm?

While Qualcomm is still firmly in the lead when it comes to wireless chips, Intel has made significant progress. This time last year, Intel was barely shipping its first multimode LTE modem -- the XMM 7160 -- and even then, this solution was missing quite a few features relative to similar Qualcomm offerings.

The XMM 7260, on the other hand, comes much closer. Qualcomm's own category 6 LTE-Advanced modem, known as the MDM9x35, is still more sophisticated than the Intel part -- it's built on newer manufacturing technology, for example -- but the gap between the capabilities and time-to-market of Intel's best modem and Qualcomm's best modem has shrunken dramatically. 

It will be interesting to see how the competitive dynamic shifts as Intel moves its next generation modems internally on its leading-edge manufacturing technology. 

What does this mean for Samsung (and potentially Apple)? 

The development of competitive cellular modem technologies is difficult. Even Samsung, which has been developing modems internally for a number of years, still relies on external vendors for its premium products. Apple, too, another major handset vendor, currently relies on Qualcomm for stand-alone modems. 

Perhaps some day, both Samsung and Apple will have competitive enough in-house solutions so as to obviate the need for external vendors; but, given the R&D intensity of this market, it's more likely that both companies will rely on external vendors for years to come.

If Intel can show multiple generations of consistent, timely execution, then it could not only be a trusted supplier to Samsung, but it could even supply Apple, as well. This could potentially be good for Apple and Samsung, as having two strong component vendors probably means lower component prices than in the case of having a single dominant vendor. 

Foolish bottom line

It's interesting to see Intel gain increasing traction within Samsung's supply chain. In this case, Samsung wins, as it now has two credible high-end modem suppliers, and Intel wins because it looks like it's finally going to start seeing a reversal in the multi-quarter slump of its mobile business. Qualcomm, on the other hand, probably isn't too excited that it has some real competition in the upper end of the stand-alone cellular baseband space.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information