Intel's window closing in portable device market: TI's OMAP chipset gaining market share during Xscale's slow ramp - Semiconductors

Electronic News, May 27, 2002 by Tom Murphy

Intel Corp. launched its Xscale processor line earlier this year to give the company a competitive position in the wireless handheld market, but so far the PC microprocessor king hasn't shown it can compete or gain any momentum in a market dominated by other players.

The notion was backed up by financial analyst Joe Osha of Merrill Lynch, who attended the analyst conferences of both Intel and portable device market leader Texas Instruments Inc. After witnessing TI's conference May 16 near Dallas, Osha concluded:

"The presentation from the manager of TI's OMAP platform was impressive and illustrates why the company had commanded a majority of the industry's 2.5G design wins to date. When we met with Intel at that company's analyst meeting a few weeks ago, the company insisted that it has not missed any material opportunities on 2.5G even though it is only sampling CDMA silicon in the second half of 2002. TI put up a comprehensive list of OMAP design wins that supports our own belief--TI has already wrapped up a significant portion of next-generation handset design wins. With Qualcomm's proprietary BREW platform still looking competitive as well, we think Intel may have been relegated to second-tier status in 2.5G."

Can Intel gain any market momentum with its Xscale products with these surmounting odds? It remains to be seen whether or not Intel can stomach any market it does not control in the way it dominates PCs. But Intel does have the deep pockets to weather any market for a given time as it has done many times in its history in such areas as graphics ICs and system memory.

In response to Osha's comments, Intel says just wait and see.

"So in terms of 2.5G baseband wins, TI has some early wins," an Intel spokesman said. "This segment is in its infancy and we believe there's still considerable opportunity that our highly integrated chips will compete aggressively for."

Nevertheless, TI has a number of key strategic wins for devices that are designed to deliver both data and voice to portable devices. Among them are the Palm Pilot, HP's Jornada wireless PDA and a next-generation Nokia cellular handset.

Intel on the other hand has a considerable number of design wins in portable devices with its flash memory products. Intel has been using its customer base there and some relatively impressive high-performance numbers on its ARM-based Xscale processors to try and earn sockets.

But TI has had its baseband DSP and ARM-based applications processor solution as one of the industry standards for cell phones for a few years running. It is using that base to package its baseband chip set with middleware. It has allowed third parties such as Microsoft to optimize operating systems and software to the chip set as TI endeavors to provide its customers the easiest migration path to next generation wireless devices, according to Jeff Wender, a marketing manager for TI's OMAP platform. A key element in TI's early success is lining up operating system support and applications support.

"TI provides virtually all the essential components," Wender said. "The customer only has to pour plastic around our chipset, select and LCD screen and he's ready to bring a solution to market."