If you listen to any of the presentation materials from any of the major chip vendors to the high-volume mainstream smartphone space, the key message from these vendors is that OEMs want the whole platform. Up until very recently, Intel (INTC +4.85%) has been missing a pretty critical piece of that platform -- a low-power connectivity solution (Wi-Fi, Bluetooth, and so on). Intel has long sold connectivity products for notebooks and desktops, but for its mobile platforms it has relied on external chips from the likes of Broadcom (NASDAQ: BRCM) and Qualcomm (QCOM 0.38%).
Intel Free Press article highlights Lighting Peak
Buried in the depths of an obscure article published on the Intel Free Press website is a look at several of Intel's wireless technologies that Intel demonstrated at this year's Mobile World Congress. The "sexy" part of the demonstration was Intel's XMM 7260 LTE-Advanced category 6 modem, which Intel hopes will bring its feature-set on par with what Qualcomm will be offering with its MDM9x35 (although lack of CDMA support will lock Intel's XMM 7260 out of carriers that require CDMA support).
Intel's Lightning Peak (it's the tiny chip inside the brown square). Source: Intel Free Press.
However, the less sexy (but equally interesting) part of this article was that Intel had demonstrated its very first low-power Wi-Fi/Bluetooth combination chip intended for smartphones and tablets. This completes the final part of Intel's low-power puzzle and allows the company to offer a complete mobile platform solution using Intel-designed silicon. This not only makes life easier for the OEMs (as they have one supplier for the major components), but it also allows Intel to capture more content share in handsets/tablets.
Intel now joins Broadcom, Qualcomm, and others
Smartphone processor winners such as Qualcomm, MediaTek, and Marvell (MRVL +0.38%) have had the entire platform for quite some time. Broadcom has had it too, although its modem development as well as its applications processors have traditionally been weak relative to that from the competition. Intel, on the other hand, recently sorted out its modem and the applications processor (but still needs to integrate them together), but it has sourced connectivity products from third parties.
For very high-end phones, this isn't much of a problem -- the handset OEMs like to pick and choose each component in that case, and Broadcom seems to win the very high-end sockets. However, for more mass-market designs, OEMs don't want to worry about that and instead want a complete platform with drivers delivered so that they can get to market quickly. Without the full platform, gaining meaningful design win traction is, as Intel has seen, very difficult.
Intel now has the complete platform and, over the course of 2015 and 2016, should release products known as SoFIA that more tightly integrate the cellular modem, connectivity combo, and the apps processor for even more cost savings for entry-level and value handsets.
Foolish bottom line
Intel is still very new and very inexperienced in the mobile game, particularly when it comes to providing a complete platform. Qualcomm is the one to beat, particularly as it has world-class IP across the board. Further, Broadcom, Marvell, and others still have more experience in providing low-power connectivity combos than Intel does. That said, it is nice to see this major "gap" in Intel's product portfolio finally get filled. Intel investors should keep a close eye on whether this (among other things) helps boost the company's smartphone traction during 2015.
