Qualcomm Moves to 4K with Snapdragon 805

Qualcomm Technologies is bringing console quality graphics with 4K capture and display capability to mobile devices. The company has introduced the new Snapdragon 805, expanding the already widely popular Snapdragon applications processor SoC family, and promises to change the landscape of mobile entertainment systems and communications.

The new SoC has an advanced Adreno GPU, the 420, which Qualcomm says delivers 40 percent more graphics and compute performance than its previous generation GPU while using 20% less chipset power than Snapdragon 800 (8974 )for the same graphics workloads.. The Adreno 420 is not a minor update from Adreno 330. On the contrary, it is a new GPU architecture, 100% designed in house by Qualcomm specifically for mobile use cases, and it comes along with other substantial system level enhancements outside of the GPU itself.

Qualcomm added several completely new 3D pipeline stages in the A420, for example a Hull shader, domain shader, geometry shader, and the first AP GPU to incorporate a dedicated Tessellation hardware; the shader subsystem and caches have also been augmented in order to support OpenGL ES 3.0, OpenCL 1.2 Full profile, and DX11.

Also, some hardware improvements were made to the GPU front end to improve depth rejection, and the texture pipe is >2x more capable than it was for Adreno 330 both in terms of raw texel performance and also in its support of superior compression schemes like ASTC.

The A420 also includes several render backend hardware improvements such as wider & more efficient data paths to internal memory. There’s a new color/z compression module that when combined with 8084’s more capable 128bit 800MHz LPDDR3 (or 933MHz PCDDR3) memory bus, enables Adreno 420 to maintain its peak pixel fill rate more often, and that is particularly important when driving 8Mpixel (4Kx2K) displays.

Qualcomm says they’ve increased performance without sacrificing power by including more DCVS voltage/frequency pairs, and moving the position of the GPU within Snapdragon to a new, Low-latency high bandwidth MMU/Bus (i.e. a dedicated bus that is independent of the Video Decoder and ISPs).

The 805 introduces a new 2.5 GHz Krait 450 CPU based on the ARMv7 instruction, however, like Apple and Nvidia, the CPU’s architecture is Qualcomm’s unique design. Unlike other SoC builders, however, the Krait cores dynamically adjust the clock and voltage as system demands change. This manages power consumption for longer battery life, while being able to kick into overdrive if an application demands it. Additional performance enhancements include a new memory manager that doubles memory bandwidth to 25.6 Giga bytes per second making it capable of delivering 4K images and video smoothly and continuously.

The Snapdragon 805 will include two high-bandwidth wide bit-width image signal processors (ISPs). That will enable the 805 to capture with ease 4K images at high frame rates, and/or high-speed stereo images, dual camera (front and back) images for video conferencing, and super-fast sports photos.

In order to handle the new 4K images the 805 will be one of the first production processors to support H.265/HEVC CODECs. Qualcomm acquired the assets of IDT’s Silicon Optics Hollywood Quality Video (HQV) and Frame Rate Conversion (FRC) Video Processing product lines back in 2011and incorporated the technology into its video processing engine. The HQV and FRC processes handle de-interlacing and scaling and can smoothly upscale a Blu-ray file to 4K UHD.
The new Hexagon V6 DSP can multi task, and run video conversions, and/or Enhanced HD multi-channel audio (encoding, decoding, transcoding, noise cancellation, bass boost, virtual surround and other enhancement functions).

When the Snapdragon 805 goes into full production, it will use the new TSMC’s 20nm production node, which will reach commercial capacity in early 2014.
Using Qualcomm’s fusion-paring, the Snapdragon 805 can be combined with the new Gobi 9×35 LTE CAT 6 modem supporting 4K streaming and transfer. The 9×35 is smaller and allows an OEM to realize a thinner and more power efficient part than the current 9×25 modem (introduced in February 2013) while still supporting LTE Category 4— also known as LTE Advanced. CAT6. LTE, however will reach speeds of 300 Mbps (compared to CAT4’s150Mbps). The dual band HSPA+ Gobi MDM 9×35 is the industry’s first modem manufactured in a 20nm process technology.

Qualcomm is shipping samples of the Snapdragon 805 and Gobi 9×35 to ODMs and OEMs now. You can expect to see them in amazing new mobile devices second half of 2014.

Take Aways

It’s the most aggressive move in mobile graphics by any company, to add all the shader types, and HW tessellation, on top of what they did in Subdiv for Moto, shows Qcom as the most committed mobile graphics supplier today. It really is bringing console class graphics to mobile devices.

4K requires a big fat pipe to suck up all the pixels that come blasting at you 15 billion bits a second. So Qualcomm put in tow ISPs to handle the flow. Once you start eating that many bits that fast you have to compress them, so Qcom incorporated the new H.265 CODEC. And then if you want to send them anywhere you a wide memory bus so Qcom double the memory bus width, and up’ed the clock rate. Net result – Qualcomm can really do 4K.

How Windows RT could Thrive

Microsoft’s decision to create a Windows 8 version for use on ARM processors called Windows RT has become a bit of an enigma in the industry. Windows RT based tablets were launched with much fan fare yet sales of RT based devices has fallen way short of predictions.

In fact, Microsoft is selling their Surface RT to schools now for $100, something that suggests that the Windows Surface RT experiment is pretty much dead. Microsoft has its own self to blame for this. Their decision to include Office minus Outlook was a serious blow for these early models. While newly created Windows 8 apps worked on RT, the fact that it was not backward compatible with existing Windows Apps really added to its lack of allure for most customers

Also their TV ads didn’t help either. Instead of showing people the virtues of Surface they decided to show hip young people dancing and jiving holding RT Surface tablets, something that makes no sense to anyone who wanted to know what Surface really was and why they should even consider buying it. These ads were a waste of money and a big mistake in my book.

Our research suggests that Windows RT in 10-inch tablets and laptops probably will never take off. Mostly because of lack of backward compatibility with current Windows apps, which to a lot of people is still a big issue. While it is true that Windows 8 apps work on RT devices, the lack of Windows 8 apps, especially those long tail apps, will continue to hurt it in these types of models too.

However, there is one device, or area, where RT could be quite welcomed. One of the things you may have noticed is that 7” or 8” tablet prices have come down in price. Over the weekend I saw a 9” tablet for $99.00 at Fry’s. Sure it was a no-name brand but it had Android Ice Cream Sandwich on it and was more than serviceable as a basic tablet. What we are seeing is a race to the bottom with smaller screen tablets and it is becoming harder and harder for any tablet players to compete when prices get this low and they are all pretty much alike.

Gaming and Media

What is needed in the small tablet space is differentiation. Just using a mainstream processor will not cut it if the goal is to be heard above the crowd. It is true that being tied to a rich ecosystem like Amazon and Apple have for their smaller tablets helps them differentiate but for others, especially those betting on Windows 8 for tablets, they have no edge against this onslaught of race to the bottom low-end tablet space.

While CPUs in smaller tablets are important for delivering long battery life, the need for an upscale processor is somewhat minimal. However, one area of content that is important–even in small tablets–is games and video. For games, the GPU will become an important part of differentiating these smaller tablets. Especially since the use case for many of these smaller tablets will lean toward media and entertainment.

This is where RT could be on somewhat equal footing. In smaller tablets, backward compatibility with existing Windows apps is not important. Rather, it just needs to run Windows 8 apps and do them extremely well. But games and video built for Windows 8 could have an advantage when running an ARM processor like Nvidia’s Tegra or Qualcomm’s Snapdragon. Both processors which, for the time being, are likely to have a graphics advantage over their lower cost x86 counterparts. ((We can debate all we want the degree of which “good enough” experiences exist, but graphics is still an area where we will continue to observe clearly better visual experiences))

Nvidia has made the GPU a key part of their mobile processor known as Tegra and to date, Nvidia has had some pretty big wins in tablets because of the robustness of Tegra’s CPU and GPU. Qualcomm, with Adreno, and Intel as well, both realize that the GPU is becoming much more important in mobile and they too have been working hard on developing more powerful graphics processors for use with their mobile SoCs.

Most of Nvidia’s tablet wins have been for use with Android but vendors wanting to do Windows 8 ARM based tablets need to look closely at the role a GPU will have in driving greater differentiation with these smaller tablets. From our research we are finding that smaller tablets are mostly used for content consumption and games and not productivity. Making these smaller tablets exceed consumer’s expectations, especially with games, could allow Windows RT to be taken seriously. An SoC with an emphasis on graphics added to deliver a great gaming experience could help deliver on this use case. And if the graphics and media experience is objectively clear, consumers will pay a premium for this if the tablet is to be used for HD games and video. ((Obviously there are many variables to this, including rich applications and games being developed for Windows RT))

It will be important to watch what happens at Microsoft’s Build conf in SF next week and see how much emphasis they make on creating games for Windows 8. If this is a major part of their strategy, then RT based small notebooks and tablets could thrive in this space even if they are not a bargain based prices.

The Case for Intel’s Future Smartphone Success

In my many weekly conversations with industry insiders we discuss Intel’s chances in mobility markets, specifically smartphones. Few people are betting against Qualcomm and for very good reason in that they are entrenched at handset vendors and their 2012 roadmap, at least on paper, looks solid. What few are discussing is how Intel will pick up market share. My last column on Intel’s smartphone efforts outlined what Intel needs to demonstrate quickly to start gaining share and getting people to believe they can be a player. Now I want to take a look at why I believe Intel can and will pick up relevant market share over the next three years.

Intel Finally Broke the Code with Medfield

This isn’t Intel’s first time in mobility. Intel owned XScale, an ARM-based mobile processor that was in the most popular WinCE devices like the Compaq iPaq, one of the more popular Pocket PCs. XScale products even powered Blackberrys for a time as well. Intel sold the entire XScale mobile application processor business to Marvell in 2006 for $600M. This move was driven by Intel’s desire to focus on X86 designs. What followed were some failed mobile attempts with Menlo and Moorestown, two low power, Atom-branded processors that made their way into MIDs (Mobile Internet Devices). It appeared that Intel would make grand announcements with big names like LG for smartphones then nothing would happen afterward. Things are very different with Medfield. Handsets are at China Unicom in testing for Lenovo and Motorola announced their handsets would be at carriers for the summer.

Medfield is a huge step forward in design and integration for Intel. First, it combines the application processor with I/O capabilities on a single chip. This saves handset makers integration time and board space. Secondly, it is paired with the Intel XMM 6260 radio based on the Infineon Wireless Solutions (WLS) acquisition. This increases the Intel revenue BOM (Bill of Material) and also helps with handset integration. Finally, Intel has embraced the Android mobile OS in a huge way with a large developer investment and will provide optimized drivers for Medfield’s subsystems. This move is in contrast to their MeeGo OS efforts that didn’t go anywhere. Intel has even gone to the effort to emulate ARM instructions so that it can run native apps that talk directly to ARM. These apps are typically games that need to be closer to the hardware. This is a very good start for Intel, but as I tell my clients, if there are 10 steps to mobile silicon success, Intel just successfully crossed step 3.

It’s a Tough Smartphone Market

Intel made some very serious headway with Medfield, but it is a very competitive market out there. According to IDC, in Q4 2011, Apple and Samsung combined to garner almost 50% of the smartphone market. As I pointed out in my previous column, Apple already designs their A-Series processors and I don’t see that changing. I expect Samsung with the exception of the very low end to lean into their own Exynos silicon. Nokia at 12% Q4 smartphone share is tied to Windows Phone and Qualcomm at least for the short term. Struggling RIM doesn’t need another variable to worry about with their muddled operating system strategy and is currently tied to Qualcomm. Finally, HTC is rumored to tie up with NVIDIA on its Tegra platform on the high end. Who does this leave for Intel?

For Intel in the short term, with Motorola and Lenovo on-board, this leaves private label for carriers, LG, Sony, ZTE, Huawei, Kyocera, Sanyo and a very long tail of small manufacturers. The long tail will be a challenge for Medfield until Intel waterfalls the products line to be cost-competitive with lower end models. I expect Intel to start waterfalling products down in the end of 2012.

Why Intel Could Succeed

While I outlined the many challenges, Intel could very well succeed in the space longer term. First, the phone marketplace is a rapidly changing market. Not only have there been tremendous share shifts in the last two years, but feature phones are migrating to smartphone market resulting in exploding growth.

Operating systems are clear from shaking out. Microsoft will not go gently into the night with Windows Phone and will invest what it takes to be successful even if it takes another Nokia-like investment to own another platform. I also believe once Microsoft starts gaining share, they will devote resources for X86 on Windows Phone 8 or 9 platforms. They see Intel as successful with Medfield and the WINTEL alliance could be brought back from the dead. Long-term, I do not believe Samsung will be happy licensing someone else’s operating system, particularly with Apple’s integration and experience success. I expect Samsung to do one of three things, possibly two; increase investment in Bada to a point that it can compete with Android in a closed environment, embrace webOS, oe lean heavily into Tizen. Marketplaces in dynamic change are an opportunity for newcomers, even companies worth $140B like Intel.

One other important factor that hasn’t fully played out is “carrier versus handset-maker” dominance. Up until the Apple iPhone, the carriers dictated terms to the handset makers. Every carrier who has adopted the iPhone has taken a gross margin reduction. This doesn’t mean they made a bad decision; they had to carry the iPhone. That carrier margin reduction money is going to Apple and not the carriers. Carriers are strategizing how they can regain that dominance going forward and I believe Intel will part of those plans. Intel has the capability to partner with an extremely low cost manufacturer or ODM an entire solution, white label it to a carrier and provide a competitive Android experience. I expect a few key announcements this month at this year’s Mobile World Congress.

Of course, we cannot forget about Intel’s technology. According to tests run at Anandtech, Intel’s Medfield is competitive in power at 32nm LP so you must assume that it only gets better at Intels 22nm 3DTriGatetechnology. Intel will roll Atom into 22nm in 2013 and 14nm in 2014. This is all the while in 2012 TSMC is at best case at 28nm and GLOBALFOUNDRIES and Samsung is at 32nm.

I define success as the ability to reach a relevant level of profitable business that supports the desired brand goals. For Intel, this doesn’t need to be 80% like they have in the PC market, but needs to be a profitable 20%.

What this Means for Intel, Qualcomm, Texas Instruments, and NVIDIA

Over a period of three years, Intel will start to take market share from Qualcomm, Texas Instruments and NVIDIA, albeit very small in 2012. As Intel integrates wireless, moves to 14nm, and waterfalls their offerings to lower price point smartphones, this makes much more competitive to handset makers and carriers. I expect Huawei, ZTE, or a major carrier to go big with Intel in 2013 which will make a huge difference. One thing to remember about Intel; unlike others in the marketplace, Intel also captures the manufacturing margin TSMC and GLOBALFOUNDRIES makes and the design margin ARM earns. While Intel has a long way to go in proving themselves, they have the start they never had before at a time to take advantage of the mammoth growth in smartphones. Never count Intel out of any market, no matter how many times they have tried and failed.

What Intel Must Demonstrate in Smartphones (and soon)

Intel made a big splash at CES 2012 with the announcement that Motorola and Lenovo committed to Intel’s Medfield clip_image002smartphone solution. This came on the heels of a disappointing break-up between Intel and Nokia as well as a lack of previous traction with LG. While Intel has come farther than they have ever come before with one of their X86 SOCs, they still have a long way to go to claim smartphone victory. Of course Intel knows this and is working diligently and sparing no expense. The biggest challenge Intel faces is attacking a market where the incumbent, ARM ecosystem partners Qualcomm, NVIDIA, and Texas Instruments have almost 100% market share. To start gaining share in smartphones, Intel must demonstrate many things in the near future.

More Design Wins with Key Players

The Motorola announcement was impressive in that Moto has a respected name in smartphones, but they won’t carry Intel that far alone. Lenovo is an even smaller player and while very successful in PCs, hasn’t been able to secure a lot of smartphone market share even in their home country, China. Intel knows they need a few more partners to start chipping away at market share and I expect them to announce at least one at this year’s Mobile World Congress.

One of the challenges is that many of the top players are already locked-in in one way or another, Intel has some negative history with, or has rapidly declining share. Apple already has their own A-Series SOC, Samsung has Exynos SOC, and Nokia rebuffed Intel last year and is clearly locked into ARM and Microsoft for the time being. RIM as a partner is a shaky proposition and HTC is an aggressive player but is recently dropping share. That leaves lower smartphone market share holders LG, Sony, Sharp, NEC and ZTE in the short term.

Longer term, I don’t expect Apple or Samsung to get out of the SOC business because they have been successful with their own strategies. I cannot see Nokia or Microsoft motivated to drive a change or provide dual support for X86 until Windows 9. RIM is in a free-fall with no bottom in sight. Intel is forced to take the long-term approach as they are with Lenovo by developing smaller smartphone players to become larger ones. ZTE certainly is a good long term prospect as is Huawei. If Intel can leverage their PC franchise with them I could see them being successful.

Relevant, Differentiated, and Demonstrable Usage Models

In fighting any incumbent, the new entrant must provide something well above and beyond what the incumbent offers to incent a change in behavior. I am assuming that Intel won’t lead in low price or lowest development cost, so they must offer handset makers or the carriers a way to make more money or get consumers to demand an Intel-based smartphone. Regardless of which variable Intel wants to push, they must devise relevant, differentiated and demonstrable usage models that ARM cannot.

By relevant I mean that it must be fixing a known pain point or creating a real “wow” feature consumers never asked for, but is so cool it cannot be passed up. One pain point example is battery life. Battery life is simply not good enough on smartphones when used many times daily. If this weren’t true, car chargers and battery backs wouldn’t be so popular. Wireless display is useful and cool but not differentiated in that Apple can enable this via AirPlay. Demonstrable means that it must be demonstrated at the store, an ad, or on-line on a web site. If something isn’t demonstrable then it may as well not exist.

I would like to see Intel invest heavily in modularity, or the ability to best turn the smartphone into a PC through wireless display and wireless input. Yes, this is dangerous short-term in that if Intel does a great job at it then they could eat into their PC processor franchise. But, this is the innovator’s dilemma, and a leader must sacrifice something today to get something tomorrow. I could envision an Intel-based emerging region smartphone that enables PC functionality. ARM cannot offer this well today but will be able to in the future with their A15 and beyond-based silicon. Intel should jump on the modularity opportunity while it lasts.

One other opportunity here is for Intel to leverage their end-to-end experience from the X86-based Intel smartphone to the X86-based data center. If Intel can demonstrate something incredible in the end-to-end experience with something like security or a super-fast virtualized desktop, this could be incredibly impactful. One thing that will be with us for at least another 5 years is bandwidth limitation.

Carrier Excitement

Outside of Apple, the carriers are the gatekeepers. Consumers must go through them to get the wireless plans, the phones, and most importantly, the wireless subsidy. Apple’s market entry strategy with AT&T on the iPhone was a strategic masterpiece in how to get into a market and change the rules over time. Apple drove so much consumer demand for iPhones that the carriers were begging Apple to carry the iPhone, the exact opposite of the previous decade.

Intel must get carriers excited in the new usage models, bring them a new stream of revenue they feel they are being cut out from, or lower their costs. Intel doesn’t bring them revenue from content side but could I can imagine Intel enabling telcos to get a piece of classic retailer’s PC action once “family plans” become a reality. While telco-distributed PCs weren’t a big success in the past, this was due primarily from the absence of family data plans. I can also imagine Intel helping telcos lower the costs of their massive data centers with Xeon-based servers. Finally, if Intel could shift traffic on the already oversold “wire” by shifting processing done in the cloud and onto their SOCs, this would be very good in a bandwidth-constrained environment.

Competitive Handset Power

At CES, Intel showed some very impressive battery life figures for Medfield handsets:

• 6 hour HD video playback

• 5 hours 3G browsing

• 45 hour audio playback

• 8 hour 3G talk time

• 14 day standby

This was measured on Intel’s own reference platform which is somewhat representative of how OEMs handsets will perform. What will be very telling will be how Medfield performs on a Tier 1 handset maker, Motorola when they launch in Q3 2012. There is no reason to think the Moto handset won’t get as impressive battery life figures, but Intel could gain even more credibility by releasing those figures as available.

When Will We Know When/If Intel’s Smartphone Effort is a Success?

Intel has slowly but surely made inroads into the smartphone market. Medfield is impressive but competing with and taking share from an incumbent with 99%+ market share is a daunting task. The easy answer to measure Intel progress is by market share alone but that’s lazy. I believe that Intel smartphone efforts should first be measured by handset carrier alliances, the number of handset wins, the handset quality and the new end usage models their SOCs and software can enable. As these efforts lead to potential share gain does it make sense to start measuring and scrutinizing share.

The ARM Wrestle Match

I have an un-healthy fascination with semiconductors. I am not an engineer nor I do know much about quantum physics but I still love semiconductors. Perhaps because I started my career drawing chip diagrams at Cypress Semiconductor.

I genuinely enjoy digging into architecture differences and exploring how different semiconductor companies look to innovate and tackle our computing problems of the future.

This is probably why I am so deeply interested in the coming processor architecture war between X86 and ARM. For the time being, however, there is a current battle within several ARM vendors that I find interesting.

Qualcomm and Nvidia, at this point in time, have two of the leading solutions for most of the cutting edge smart phones and tablets inside non-Apple products.

Both companies are keeping a healthy pace of innovation looking to bring next generation computing processors to the mass market.

What is interesting to me is how both these companies are looking to bring maximum performance to their designs without sacrificing low-power efficiency with two completely different approaches.

One problem in particular I want to explore is how each chipset tackles tasks that require both computationally complex functions (like playing a game or transcoding a video) and ones that require less complex functions (like using Twitter or Facebook). Performing computationally complex functions generally require a great deal of processing power and result in draining battery life quickly.

Not all computing tasks are computationally complex however. Therefore the chipset that will win is one that has a great deal of performance but also can utilize that performance with very low power draw. Both Nvidia and Qualcomm license the ARM architecture which for the time being is the high performance-low power leader.

Nvidia’s Tegra 3
With their next chipset, Tegra 3, Nvidia is going to be the first to market with a quad-core chipset. Tegra 3 actually has five cores but the primary four cores will be used for computationally complex functions while the fifth core will be used to handle tasks that do not require a tremendous amount of processing power.

The terminology for this solution is called Variable SMP (symmetric multiprocessing). What makes this solution interesting is that it provides a strategic and task based approach to utilizing all four cores. For example when playing a multi-media rich game or other multi-media apps all four cores can be utilized as needed. Yet when doing a task like loading a media rich web page two cores may be sufficient rather than all four. Tegra 3 can manage the cores usage, based on the task and amount of computer power needed, to deliver the appropriate amount of performance for the task at hand.

Tegra 3’s four cores are throttled at 1.4Ghz in “single core mode” and 1.3Ghz when more than one core is active. The fifth core’s frequency is .5Ghz and is used for things like background tasks , active standby, and playing video or music, all things that do not require much performance. This fifth core because it is only running at .5Ghz requires very little power to function and will cover many of the “normal” usage tasks of many consumers.

The strategic managing of cores is what makes Tegra 3 interesting. This is important because the cores that run at 1.4 Ghz can all turn off completely when not needed. Therefore Tegra 3 will deliver performance when you need it but save the four cores only for computationally complex tasks which will in essence save battery life. Nvidia’s approach is clever and basically gives you both a low power single-core, and quad-core performance computer at the same time.

Qualcomm’s S40 Chipset
Qualcomm, with their SnapDragon chipset, takes a different approach with how they tackle the high performance yet low power goal. There are two parts of Qualcomm’s S40 Snapdragon chipsets that interest me.

The first is that the S40 chipset from Qualcomm will be the first out the door on the latest ARM process the Cortex A15. There are many advantages to this new architecture, namely that it takes place on the new 28nm process technology that provides inherent advantages in frequency scaling, power consumption and chipset size reduction.

The second is that Qualcomm uses a proprietary process in their chipsets called asynchronous symmetric multiprocessing or aSMP. The advantage to aSMP is that the frequency of the core can support a range of performance rather than be static at just one frequency. In the case of the S40 each core has a range of 1.5Ghz to 2.5Ghz and can scale up and down the frequency latter based on the task at hand.

Qualcomm’s intelligent approach to frequency scaling that is built into each core allows the core to operate at different frequencies giving a wide range of performance and power efficiency. For tasks that do not require much performance like opening a document or playing a simple video, the core will run at the minimum performance level thus being power efficient. While when running a task like playing a game, the core can run at a higher frequency delivering maximum performance.

This approach of intelligently managing each core and scaling core frequency depending on tasks and independent of other processes is an innovative approach to simultaneously delivering performance while consuming less power.

I choose to highlight Nvidia and Qualcomm in this analysis not to suggest that other silicon vendors are not doing interesting things as well. Quite the contrary actually as TI, Apple, Marvel, Broadcom, Samsung and others certainly are innovating as well. I choose Qualcomm and Nvidia simply because I am hearing that they are getting the majority of vendor design wins.

The Role of Software in Battery Management
Although the processor play’s a key role in managing overall power and performance of a piece of hardware, the software also plays a critical role.

Software, like the processor, needs to be tuned and optimized for maximum efficiency. If software is not optimized as well it can lead to significant power drains and result in less than stellar battery life.

This is the opportunity and the challenge staring everyone who makes mobile devices in the face. Making key decisions on using the right silicon along with effectively optimizing the software both in terms of the OS and the apps is central going forward.

I am hoping that when it comes to software both Google and Microsoft are diligently working on making their next generation operating systems intelligent enough to take advantage of the ARM multi-core innovations from companies like Qualcomm and Nvidia.

These new ARM chipset designs combined with software that can intelligently take advantage of them is a key element to solving our problem with battery life. For too long we consumers have had an un-healthy addiction to power chords. I hope this changes in the years to come.

Windows 8 Desktop on ARM Decision Driven by Phones and Consoles

There has been a lot written about the possibility of Microsoft not supporting the Windows 8 Desktop environment on the ARM architecture. If true, this could impact Microsoft, ARM and ARM’s licensees and Texas Instruments, NVIDIA, and Qualcomm are in the best position to challenge the high end of the ARM stack and are publicly supported by Microsoft.  One question that hasn’t been explored is, why would Microsoft even consider something like this? It’s actually quite simple and makes a lot of sense the position they’re in; it’s all about risk-return and the future of phones and living room consoles.

The Threat to Microsoft

The real short and mid term threat isn’t from Macs stealing significant Windows share from Microsoft, it’s all about the Apple iPad and iOS.  It could also be a little about Android, but so far, Android has only seen tablet success in platforms that are little risk to a PC, like the Amazon Kindle Fire.  Market-wise, the short term threat is about consumer, too, not business.  Businesses work in terms of years, not months. The reality is that while long term, the phone could disrupt the business PC, short term it won’t impact where Microsoft makes their profits today. Businesses, short term, won’t buy three devices for their employees and therefore tablets will most likely get squeezed there.  Business employees first need a PC, then a smart phone, and maybe a few a tablet.  There could be exceptions, of course, primarily in verticals like healthcare, retail and transportation.

What About Convertibles?

One wild-card are business convertibles.  Windows 8 has the best chance here given Microsoft’s ownership on business and if you assume Intel or AMD can deliver custom SOCs with low enough power envelopes, thermal solutions and proper packaging for thin designs.  Thinking here is that if business wants a convertible, they’ll also want Windows 8 Desktop and more than likely backward compatibility, something only X86 can provide.  So net-net, Microsoft is covered here if Intel and AMD can deliver.

Focus is Consumer and Metro Apps

So the focus for Microsoft then is clearly consumer tablets, and Microsoft needs a ton of developers writing high quality, Metro apps to compete in the space.  Metro is clearly the primary Windows 8 tablet interface and Desktop is secondary, as it’s an app.  Developers don’t have money or time to burn so most likely they will have to choose between writing a Metro app or rewriting or recompiling their desktop to work with ARM and X86 (Intel and AMD) desktop. It’s not just about development; it’s as expensive for devs to test and validate, too.  Many cases it’s more expensive to test and validate than it is to actually develop the app.  Strategically, it then could make sense for Microsoft to push development of the Metro apps and possibly by eliminating the Desktop on ARM option, makes the dev’s decision easier.

Strategically, It’s About Phones and the Living Room in the Endimage

Windows 8, Windows Phone 7, and XBOX development environments are currently related but not identical.  I would expect down the road we will see an environment that for most apps that don’t need to closely touch the hardware, you write once and deploy onto a Microsoft phone, tablet, PC and XBOX.  The unifier here is Metro, so getting developers on Metro is vitally important.

If Microsoft needed to improve the chances developers will swarm to Metro and do it by taking a risk by limiting variables, let’s say by eliminating ARM desktop support, it makes perfect sense.

Gaming AMD’s 2012 Strategy

AMD intends to pursue “growth opportunities” in low-powered devices, emerging markets and Internet-based businesses.

There’s an awful lot of mis-guided analysis wafting about regarding AMD’s new strategic direction, which the company says it will make public in February. This piece is to help you (and me) sort through the facts and the opportunities. I last took a look at AMD’s strategies earlier this year, available here.

Starting With the Facts

  • AMD is a fabless semiconductor company since 2009. The company depends on GlobalFoundries and soon Taiwan Semiconductor to actually fabricate its chips;
  • In its latest quarter, AMD had net income of about $100 million on $1.7 billion in revenue. Subsequently, the company announced a restructuring that seeks to cut costs by $118 million in 2012, largely through a reduction in force of about ten percent;
  • AMD has about a 20% market share in the PC market, which Intel says is growing north of 20% this year, largely in emerging markets;
  • AMD’s products compete most successfully against rival Intel in the low- to mid-range PC categories, but 2011 PC processors have underwhelmed reviewers, especially in performance as compared to comparable Intel products;
  • AMD has less than a 10% market share in the server market of about 250,000 units, which grew 7.6% last quarter according to Gartner Group;
  • AMD’s graphics division competes with nVidia in the discrete graphics chip business, which is growing in profitable commercial applications like high-performance supercomputing and declining in the core PC business as Intel’s integrated graphics is now “good enough” for mainstream buyers;
  • AMD has no significant expertise in phone and tablet chip design, especially the multi-function “systems on a chip (SOCs)” that make up all of today’s hot sellers.

What Will AMD CEO Rory Read’s Strategy Be?

I have no insider information and no crystal ball. But my eyebrows were seriously raised this morning in perplexity to see several headlines such as “AMD to give up competing with Intel on X86“, which led to “AMD struggling to reinvent itself” in the hometown Mercury News. I will stipulate that AMD is indeed struggling to reinvent itself, as the public process has taken most of 2011. The board of directors itself seems unclear on direction. That said, here is my score card on reinvention opportunities in descending order of attractiveness:

  1. Servers —  For not much more work than a desktop high-end Bulldozer microprocessor, AMD makes Opteron 6100 server processors. Hundreds or thousands more revenue dollars per chip at correspondingly higher margins. AMD has a tiny market share, but keeps a foot in the door at the major server OEMs. The company has been late and underdelivered to its OEMs recently. But the problem is execution, not computer science.
  2. Desktop and Notebook PCs — AMD is in this market and the volumes are huge. AMD needs volume to amortize its R&D and fab preparation costs for each generation of products. Twenty percent of a 400 million chip 2011 market is 80 million units! While faster, more competitive chips would help gain market share from Intel, AMD has to execute profitably in the PC space to survive. I see no role for AMD that does not include PCs — unless we are talking about a much smaller, specialized AMD.
  3. Graphics Processors (GPUs) — ATI products are neck-and-neck with nVidia in the discrete graphics card space. But nVidia has done a great job of late creating a high-performance computing market that consumes tens of thousands of commercial-grade (e.g., high price) graphics cards. Intel is about to jump into the HPC space with Knight’s Corner, a many-X86-core chip. Meanwhile, AMD needs the graphics talent onboard to drive innovation in its Fusion processors that marry a processor and graphics on one chip. So, I don’t see an AMD without a graphics component, but neither do I see huge profit pools either.
  4. Getting Out of the X86 Business — If you’re reading along and thinking you might short AMD stock, this is the reason not to: the only legally sanctioned software-compatible competition to X86 inventor Intel. If AMD decides to get out of making X86 chips, it better have a sound strategy in mind and the ability to execute. But be assured that the investment bankers and hedge funds would be flailing elbows to buy the piece of AMD that allows them to mint, er, process X86 chips. So, I describe this option as “sell off the family jewels”, and am not enthralled with the prospects for success in using those funds to generate $6.8 billion in profitable revenue or better to replace today’s X86 business.
  5. Entering the ARM Smartphone and Tablet Market— A sure path to Chapter 11. Remember, AMD no longer makes the chips it designs, so it lacks any fab margin to use elsewhere in the business. It starts against well-experienced ARM processor designers including Apple, Qualcomm, Samsung, and TI … and even nVidia. Most ARM licensees take an off-the-shelf design from ARM that is tweaked and married to input-output to create an SOC design, that then competes for space at one of the handful of global fab companies. AMD has absolutely no special sauce to win in the ARM SOC kitchen.To win, AMD would have to execute flawlessly in its maiden start (see execution problems above), gain credibility, nail down 100+ design wins for its second generation, and outrace the largest and most experienced companies in the digital consumer products arena. Oh, and don’t forget volume, profitability, and especially cash flow. It can’t be done. Or if it can be done, the risks are at heart-attack levels.

“AMD intends to pursue “growth opportunities” in low-powered devices, emerging markets and Internet-based businesses.” One way to read that ambiguous sentence by AMD is a strategy that includes:

  • Tablets and netbooks running X86 Windows 8;
  • Emerging geographic markets, chasing Intel for the next billion Internet users in places like Brazil, China, and even Africa. Here, AMD’s traditional value play resonates;
  • Internet-based businesses such as lots of profitable servers in the cloud. Tier 4 datacenters for Amazon, Apple, Facebook, Google, and Microsoft are a small but off-the-charts growing market.

So, let’s get together in February and see how the strategy chips fall. Or post a comment on your game plan for AMD.