Liliputing reported Rockchip is "showing off one of the first chipsets" based on the partnership that Intel (NASDAQ:INTC) and Rockchip announced back in May. In particular, it looks as though this is a dual core ARM (NASDAQ:ARMH) Cortex A5 processor which has an integrated 2G/3G modem as well as separate RF chip that integrates 2G/3G RF, Wi-Fi/Bluetooth, and GPS functionality.
What seems to have people freaked out is that this is based on an ARM processor rather than an Intel processor, leading some to believe that there has been an abrupt change in plan.
This couldn't be farther from the truth.
This is SoFIA's predecessor
Remember when Intel first announced its SoFIA system-on-chip platform for low-cost smartphones and tablets? Intel's management team explicitly noted that they were taking a design that had already been under development from its "feature phone" (i.e., dumbphone) product offerings and goosing it to include Intel-designed processor cores.
What we are seeing here with the recently announced platform from Rockchip and Intel is a modem platform known as the XMM 6321 (consisting of the XG632 baseband/SoC and AG620 RF chip). According to an Intel road map that leaked quite some time ago, this part was under development well before Intel inked its deal with Rockchip.
Why release this chip?
In this day and age, smartphones are ubiquitous, and with each passing day "smartphones" displace traditional "feature phones" as prices on the latter come down. It's interesting, then, to see Intel (along with Rockchip) release what is essentially a feature-phone-targeted part.
According to the aforementioned leaked roadmap, Intel had listed Samsung, Huawei, LG, and ZTE as (potential) customers for this product. The fact that the product is still being launched leads me to believe that there is nontrivial demand for the platform, and given how low Intel's Mobile and Communications Group revenue is (it raked in a mere $1 million last quarter), my guess is that Intel is happy to grab any business that it can.
What does the future hold?
Intel's CEO Brian Krzanich talked about the company's strategy with SoFIA and the low-cost smartphone market on the company's most recent earnings call. He alleged that Intel has "SoFIA in the labs running" and that the LTE version of SoFIA is "on schedule" for the "first half of ."
These chips, by their very name ("Smart or Feature Phone on Intel Architecture") will feature Intel-designed processor cores, and should actually offer much better performance than the dual core ARM Cortex A5 found inside of this XMM 6321 modem platform. That said, SoFIA will probably be more expensive to build, so it probably won't go into the same types of phones as the XMM 6321 will.
Foolish bottom line
When all is said and done, this new chip likely doesn't mean too much for Intel from a revenue perspective; the revenue per chip that Intel will be able to get from it is probably not high, and it's not clear how many Intel will actually be able to sell.
However, given that XMM 6321 apparently served as the springboard for Intel's upcoming SoFIA product, I'd say that whether it generates a material amount revenue or not, it was still a worthwhile for Intel to develop it.
Ashraf Eassa owns shares of ARM Holdings and Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. 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.