Phone
Qualcomm Inc., Marvell Technology Group Ltd. and Freescale Semiconductor Inc. are among the chipmakers demonstrating new kinds of Internet devices at this weeks Consumer Electronics Show in Las Vegas. Their goal: persuade consumers to ditch their Intel-powered personal computers as the primary way of going online.
“The next billion users that are going to connect to the Web arent going to be connected by the PC,” said Henri Richard, head of sales at Austin, Texas-based Freescale. “Its going to be a multitude of devices.”
Intel, the worlds largest chipmaker, makes more than 80 percent of PC processors — the brains of computers. It aims to use its Atom product, which runs small laptops known as netbooks, to break into chips for wireless devices, a market IDC estimates will increase 14 percent to more than $46 billion in 2010. Its rivals are heading in the other direction: using phone chips to woo users of PCs and consumer electronics.
While the PC will remain the main way for people to go online, portable devices are chipping away at that dominance — with mobile phones leading the charge. Qualcomm, Freescale, Marvell and Texas Instruments Inc. are using chip technology developed by ARM Holdings Plc.
Reaching a Billion
By 2013, the number of phones regularly being used to access the Web will exceed 1 billion for the first time, a fivefold increase from 2006, according to Framingham, Massachusetts-based IDC. Over the same time period, the number of Internet-connected PCs will rise to 1.6 billion from 754 million, according to IDC.
“The push right now is to connect everyone and everything, and thats why were seeing a plethora of devices,” said Jim McGregor, an analyst at Scottsdale, Arizona-based research firm In-Stat. “In terms of sheer numbers and usability, you cant compete with a handheld. Everything migrates to a mobile.”
The Consumer Electronics Show will reveal which phone-chip makers have made progress persuading computer and consumer- electronics companies to use their components. Qualcomm, the worlds largest maker of phone chips, will show off a so-called smartbook made by Lenovo Group Ltd., Chinas biggest computer maker.
That device will run on San Diego-based Qualcomms Snapdragon chip. Freescale will demonstrate similar small laptops based on its products, and Marvell will introduce products based on a new range of faster processors.
Apple Tablet?
Apple Inc., maker of the iPhone, also is planning to unveil a tablet computer this month, a person familiar with the matter said this week. Yesterday, Google Inc. introduced a touch-screen phone called the Nexus One.
“A touch-screen smartphone is actually a small tablet PC,” said Sutardja, whose company supplies the main chip for Research In Motion Ltd.s Blackberry. “The time for tablet devices is now.”
Armada Chips
In October, Marvell released a new line of chips called Armada. Those products can run fast enough to bring PC-level computing to e-readers and tablets, Sutardja said. Internet devices have previously failed to catch on with consumers because the chips that ran them were either too slow to make them useful or drew too much power, draining batteries, he said.
At CES, Intel CEO Paul Otellini plans to demonstrate mobile devices based on its chips.
“We remain committed to delivering the benefits of Intel architecture to handhelds and consumer electronics and believe that these devices will continue to become smarter with PC-like performance, computer and Internet capabilities,” said Claudine Mangano, a spokeswoman for the Santa Clara-based company. “This is Intels strength.”
Intel lost 1 cent to $20.87 yesterday in Nasdaq Stock Market trading. The shares added 39 percent in 2009. Qualcomm gained $1.13 to $48.07, and Marvell rose 40 cents to $21.43.
Intels challenge in pushing into phones and mobile devices is creating less power-hungry chips with similar performance. The companys rivals on the phone side are trying to gauge how quickly that will happen. Intel chips will continue to draw three to four times as much power as Marvells products, Sutardja said. ARM, though, doesnt expect phone chips to have an edge for long.