NVIDIA today announced its new Tegra 4i processor. It is NVIDIA’s first high-performance, low power-consuming quad-core apps processor with an integrated LTE modem that is aimed squarely at the smartphone/superphone market.

On paper at least, the Tegra 4i out-performs Qualcomm's latest industry-leading chips in most apps processor measurements but, most importantly for NVIDIA, it also benefits from an integrated “soft-modem” that can be re-programmed over-the-air to support new frequencies and new air interfaces; something that most other modem vendors can currently only dream of. 

Finally, it’s designed to meet the demanding needs of nascent smartphone features like HDR video capture and FPS mobile gaming, yet its fifth “companion core” ensures extremely low power consumption in less demanding situations.

For a more detailed assessment of the T4i, as it might become known, read Sravan Kundojjala's blog post.

This is NVIDIA's second major chip announcement in two months; their first was the "Tegra 4" announced at CES in January, but the two chips are very different. While the Tegra 4 has quad-core R4 A15, 72 GPU cores and no modem, the Tegra 4i has quad-core R4 A9, 60 GPU cores and an integrated LTE soft modem. Both are high performance chips but the Tegra 4 is aimed at high-end non-cellular tablets and superphones, while the Tegra 4i is aimed at high-end smartphones and superphones. Both have NVIDIA's trademark low-power companion core too, of course.

Stuart Robinson

Last week we published our smartphone applications processor market share estimates for 2010. By our estimates, the smartphone applications processor market showed an impressive 77 year-over-year revenue growth in 2010 to reach $4.52 billion. Baseband-integrated applications processors accounted for 74 percent of total apps processor revenue in 2010 and we think it will remain relatively stable in the next few years.

Here are some highlights of our smartphone applications processor market share tracker 2010 report:

• Qualcomm led the smartphone applications processor market in 2010 with 41 percent revenue share on the strength of its strong participation in the multiple software ecosystems and its broad range of integrated processors. Qualcomm’s Snapdragon processors MSM8x50 and MSM7x30 gained good traction in the second half of 2010 and featured in multiple popular smartphones. We note that Qualcomm had over 50 percent revenue share lead over its nearest competitor Texas Instruments (TI). We believe that Qualcomm has a two-to-three year advantage over most of its competitors in terms of integration and is well positioned to move further ahead of its competitors with its upcoming MSM8960 LTE apps processor.

• TI ranked number two with 27 percent revenue share in 2010 despite topped the unit shipment rankings. TI’s stand-alone apps processor unit shipment share declined to 20 percent in 2010, by our estimates. We think TI's unit shipment leadership will be challenged by Qualcomm and Samsung in 2010.

• Samsung finished with 19 percent revenue share in 2010 and its unit shipments doubled on a year-over-year basis. Samsung's 1GHz Cortex-A8 Hummingbird apps processors featured in high-volume products such as Samsung Galaxy S, Wave and Wave II.

•  Marvell ranked number four in revenue terms but the company's over-dependency on a single customer is a cause for concern.

With over ten vendors already announced 1GHz dual-core Cortex-A9 processors, we expect 2011 to be highly competitive and ARM-based applications processor vendors should build competitive barriers by investing in graphics processing technologies, integration, micro architecture, multi-core processors, semiconductor process technologies and software expertise as the entry barrier is relatively low for new vendors to enter into the ARM-based ecosystem compared to the x86 chip ecosystem.

Client reading: Smartphone Apps Processor Market Share: Qualcomm’s Revenue Share Reached 41 Percent in 2010

On Thursday February 10, 2011 in a change to its long-standing strategy of developing integrated processors, Qualcomm revealed details of its first stand-alone apps processor, APQ8060.

Also, HP announced new webOS devices including the HP Veer, Pre 3 and TouchPad tablet. All three products feature Qualcomm's Snapdragon processors. What's really interesting is that HP's Wi-Fi-only TouchPad spec sheet listed an apps processor product from Qualcomm, the APQ8060, which appears to be a stand-alone apps processor variant of Qualcomm's 3G/4G version MSM8x60. Qualcomm so far has had limited success in the tablet market with design-wins at Dell, Huawei and Viewsonic. The HP TouchPad raises Qualcomm's profile in the tablet market and makes it a strong contender.

As we noted previously in our reports, the tablet market is both a threat and opportunity for baseband-integrated vendors, especially vendors who rely on baseband-integrated products. It's a near-term threat because it will leave integrated vendors without apps processor products to address the Wi-Fi-only tablet market. It's a long-term opportunity as mobile operators push for 3G / 4G connectivity to increase their mobile broadband subscriptions, a favorable scenario to Qualcomm.

We think Qualcomm's recent Atheros acquisition and the latest APQ8060 stand-alone apps processor product address this near-term tablet market threat as Qualcomm can compete for more semiconductor dollar content in a wide variety of markets where 3G / 4G connectivity is currently not that important. Over time, many of these product categories will feature 3G / 4G connectivity, playing to the strength of baseband vendors such as Qualcomm.

As for smartphones, we continue to believe that integration will continue to win as the smartphone market fragments into different tiers. This week Broadcom announced its first HSPA+ smartphone apps processor BCM28150 which integrates 1.1GHz dual ARM Cortex-A9 cores. This product is similar to Qualcomm's MSM8x60 and ST-Ericsson's U8500 / U5500. We estimate that 70 percent of smartphones will be shipped with a baseband-integrated apps processor in 2015. Qualcomm, ST-Ericsson, Broadcom, Renesas, Intel, MediaTek and Marvell are expected to be leading integrated apps processor vendors by 2015.

Texas Instruments (TI) gave a significant boost to its OMAP applications processor line-up yesterday by announcing the ARM Cortex A-15-based OMAP 5 applications processors, OMAP5430 and OMAP5432. The OMAP5432 is likely to target Microsoft's next generation Windows PC platform-based devices while the OMAP5430 is targeted at smartphones and tablets. The OMAP 5 applications processors, designed in 28 nm,  feature two ARM Cortex-A15 cores (each running at 2GHz) and also integrate Imagination Technologies' PowerVR SGX 544 graphics cores. ARM's Cortex-A15 can support up to eight cores and TI's OMAP 5 has only two cores suggesting that the software ecosystem is not yet ready for that many cores.

Most importantly, the new OMAP 5 applications processors bring two new features including graphics computing and hardware virtualization that are currently not available in the current generation processors. Graphics computing APIs such as OpenCL facilitate GPU computing by enabling GPU access to non-graphics applications. ARM's next generation graphics core Mali T-604 also offers support for graphics computing APIs such as OpenCL.

The mobile industry is in the midst of figuring out killer apps for graphics computing. Apple is a big proponent of OpenCL and is expected to bring it to its future iOS devices which could act as a positive catalyst for OpenCL's  take-off on mobile devices. Features such as hardware virtualization can help enhance security and also preserve the legacy application ecosystem. This could be an important feature for Microsoft as they transition to a new application framework in their next generation Windows platform for SoCs.

As we mentioned on this blog previously, TI is currently facing headwinds in the smartphone market from the baseband-integrated vendors such as Qualcomm. We see the integration trend to continue in smartphones as OEMs demand more and more integration to reduce their BoM costs which could put TI's OMAP processors at a disadvantage, particularly in the low-to-mid range smartphone category. However, Microsoft's upcoming next generation Windows platform for SoCs could create another opportunity for TI to revitalize its OMAP business.

Most recently, TI announced a BlackBerry PlayBook tablet design-win at RIM but hasn't yet announced a smartphone design-win for its OMAP 4 applications processor which is bit of a concern as Qualcomm and ST-Ericsson's baseband-integrated dual-core processors come into the market. Qualcomm's MSM8x60 and ST-Ericsson's U8500 / U5500 products integrate an HSPA+ baseband modem and dual ARM Cortex-A9 cores (or equivalent) which puts them on a par with NVIDIA's Tegra2 and TI's OMAP 4 applications processors. The OMAP 5-based are expected to appear in products in late 2012 but until then TI has to defend itself from the baseband-integrated vendors.

Other publicly announced ARM Cortex-A15 licensees include NVIDIA, Samsung and ST-Ericsson and TI will probably face competing products from these companies in future.   We note that Qualcomm's next generation Snapdragon processors MSM8960 and MSM8270 are also designed in 28 nm and integrate dual Cortex-A15 equivalent processing cores. The MSM8960 also integrates multi-mode LTE baseband modem, Adreno GPU and a variety of connectivity functionality (GPS, WLAN, Bluetooth and FM). TI has to fight highly integrated products like these in future and we are cautiously optimistic about OMAP 5 given the trend towards integration. However, the market is expanding rapidly and an assortment of mobile devices are coming to the market with a variety of operating systems which could be a positive thing for TI.  

Multi-core processors are the name of the game in high-end smartphones and tablets in 2011 and are increasingly becoming an essential marketing and technology strategy for every handset vendor and silicon vendor. We estimate multi-core processor penetration in smartphones will rise from 15 percent in 2011 to 45 percent in 2015, and that ARM's Cortex-A9, Cortex-A5 and Cortex-A15 and Intel's x86 architectures will fuel the multi-core processor growth in smartphones over the next few years. 

In 2010, over 45 percent of Android smartphones shipped with a 1GHz or higher processor, hitting the ceiling on what is possible with a single core processor. Adding a second core is the logical next step to boosting the speed without raising the power consumption in handheld devices such as smartphones.

Samsung, Qualcomm, NVIDIA, ST-Ericsson, Texas Instruments, Marvell, Renesas and Broadcom are well positioned to capture share in the smartphone multi-core processor market. Freescale recently announced its i.MX 6 processor family but the company has less visibility when it comes to smartphone design-wins.

Having largely won the single core smartphone apps processor market, baseband-integrated vendors are now faced with a multi-core processor challenge. We believe the smartphone multi-core processor market will be dominated by stand-alone apps processor vendors in 2011. By our estimates, baseband-integrated multi-core apps processor will account for about one third of total smartphone multi-core apps processor shipments in 2011 with the potential for higher share in future.

Sravan Kundojjala

Microsoft announced at CES-2011 that its next generation Windows PC platform will run on ARM architectures. NVIDIA, Qualcomm and Texas Instruments were named as key ARM silicon partners. We think this is good news for stand-alone ARM applications processor vendors such as Texas Instruments (TI) and throws the company a lifeline at a time when the market is moving towards integrated solutions.

By our estimates, the market for stand-alone applications processors in smartphones contracted from 70 percent in 2007 to just under 30 percent in 2009. Vendors such as Qualcomm are driving the baseband-integrated applications processor market and these integrated processors are increasingly gaining acceptance in the smartphone market. The integrated approach is currently popular in the low-to-mid range smartphones but is gaining traction in the high-end as well lately.

Microsoft's decision to port the Windows PC platform to ARM architectures changes the market dynamics dramatically. However, it's too early to tell what impact it will have on Intel as Microsoft hasn't revealed any timeline for these new products. ARM hasn't yet revealed its 64-bit architecture and current generation ARM processors also cannot support graphics computing APIs such as OpenCL. It will take at least another 18-24 months for Microsoft to reengineer its platform for ARM architectures and to build a software ecosystem around it. This should give enough time for Intel to bring power-efficient processors to the market. Intel is expected to feature in Nokia's MeeGo smartphones and tablets in 2012 which we think would be a great psychological boost to counter ARM-based processor vendors.

The likely specs for Windows on ARM architectures are:

• CPU: Dual-core / Quad-core ARM Cortex-A9; GPU: ARM Mali-400 / Third-party GPU

• CPU: Multi-core ARM Cortex-A15; GPU: ARM Mali T-604 / Third-party GPU (Most likely configuration and leading chip vendors such as TI, NVIDIA and Samsung were already announced as licensees of Cortex-A15 cores)

• Custom ARM processor designed by Microsoft and its hardware partners

This move is a good news for NVIDIA, Qualcomm and TI as it opens up new opportunities. Qualcomm already has customer relationships with top PC vendors and is expected to leverage them to expand into the Windows PC ecosystem. This move equally helps the stand-alone applications processor vendors to revitalize their businesses and to compete for higher volume. Broadcom, ST-Ericsson, Samsung, Renesas, Marvell and Freescale could also potentially feature as future Microsoft's partners.

We believe diversified device and OS landscape favors chip vendors as they can avoid the risk of being sidelined by powerful vendors. With Microsoft's support, ARM chipset vendors can now look forward to new markets that were unavailable to them previously.

Qualcomm announced the acquisition of Atheros Communications today to strengthen its market presence in the non-handset markets and to unlock the value of its connectivity chip business. Atheros currently supplies WLAN, Bluetooth, GPS and other networking products to notebook and netbook markets. Qualcomm is currently the number one player in the cellular baseband market.

Here are our quick comments and impact on the competition,

• This acquisition will allow Qualcomm to enhance the value of its connectivity chip portfolio. Historically, Qualcomm was not a major player in the stand-alone connectivity IC market. Qualcomm successfully integrated GPS functionality into its basebands but couldn't repeat the same for WLAN, Bluetooth and FM.

• Atheros acquisition will allow Qualcomm to apply pressure on Broadcom which appears to have a broader wireless portfolio than Qualcomm including NFC (Near Field Communications). By our estimates, Broadcom ranked number two in the wireless semiconductor market (excluding memory) in Q3 2010 and is growing rapidly. Although Broadcom is a minor player in the cellular baseband market, the company is still ahead of many wireless companies in terms of wireless revenue, thanks to its connectivity business.

• Qualcomm's upcoming product, the MSM8960, integrates multi-mode LTE baseband modem, ARMv7-compliant dual applications processor cores, Adreno GPU and connectivity (WLAN, GPS, Bluetooth and FM). As far we know, this is the first cellular baseband product that integrates a variety of connectivity functions. We believe products like this could apply pressure on Broadcom's stand-alone connectivity chip business in future.

• This acquisition also increases pressure on Texas Instruments (TI). TI currently draws its wireless revenues from OMAP applications processors, connectivity chips and Nokia's custom basebands. TI is expected to complete its exit from the baseband market by 2012. The lack of baseband products could leave TI without any apparent synergies between its applications processors and connectivity chips and may force TI to divest its remaining wireless business.

Overall, we believe that this acquisition will allow Qualcomm to expand into adjacent markets and also apply more pressure on its key competitors. Qualcomm successfully executed integrating applications processors into its basebands and became the number one player and now the company is trying to further the success by integrating connectivity chips.

Sravan Kundojjala

Mobile phone applications processors power today's smartphone apps and increasingly phones are promoted as packing "1GHz processors" or even "dual-cores".

Last week we published our smartphone applications processor market share data and by our estimates global applications processor revenue reached $1.84 billion in 1H 2010, up 60 percent over the same period the prior year, primarily thanks to the growth in smartphones. The increase in the smartphone market is real and it has been reflected in silicon vendors' revenues and shipments as many players are re-positioning themselves to tap into this growth. The battle between the baseband-integrated applications processor vendors and stand-alone applications processor vendors continues to fragment the market.

Here are some top-level insights from our quarterly smartphone applications processor market share tracker for 1H 2010:

• In just three years, the market for stand-alone apps processors has shrunk from around 72 percent of the total apps processor market to just 32 percent in unit terms in 1H 2010.

• Qualcomm led the overall smartphone applications processor market with 35 percent revenue share, thanks to its early-mover advantage in the Android ecosystem. Qualcomm's integrated applications processors, which combine advanced air interface technology and applications processing capability, are increasingly gaining acceptance in the smartphone market. Qualcomm's smartphone applications processor unit shipment share increased from just 3 percent in 2007 to 19 percent in 1H 2010.

• Texas Instruments (TI) led the market in unit terms with the help of its legacy Nokia relationship. TI ranked number two in the stand-alone applications processor category with 24 percent revenue share. We believe much of the TI's future growth depends on the traction for its OMAP4 series applications processors and it may prove difficult for the company if it fails to line up big customers for its OMAP4 series processors in 2011.

• Samsung's relationships with Apple and Samsung helped the company to reach number one in stand-alone category and number three overall in the smartphone apps processor market in revenue terms. Samsung is set to continue its momentum into 2011 with the help of Apple and Samsung.

• Marvell ranked number four in both revenue terms and unit shipment terms on the strength of its relationship with RIM. Marvell's ARMADA 618 / 628 high-performance processors are expected to be adopted by RIM for its smartphone and tablet products in 2011.

• Qualcomm, Texas Instruments, Samsung, Marvell, Renesas and ST-Ericsson together accounted for 98 percent of total smartphone applications processor unit shipments in 1H 2010.

Looking forward, we expect new players such as NVIDIA, Intel, Broadcom and MediaTek to attack the high-growth smartphone market with focused efforts in 2011. We also expect the stand-alone applications processor vendors to fight back with high-performance dual-core processors in 2011 which could potentially increase their value share in 2011.

- Sravan Kundojjala

Consolidation in the baseband market continued with Intel acquiring Infineon's wireless business on Monday for $1.4 billion. Infineon's takeover is the fourth high-profile announcement in the last two years. Previously NXP, Freescale and Texas Instruments announced their exits from the merchant baseband market. This signals that the entry barrier is now too high for new entrants and raises pressure on smaller players such as Marvell, Spreadtrum and Icera. Intel's acquisition of Infineon's wireless business leaves Qualcomm, MediaTek, ST-Ericsson, Intel, Broadcom and Renesas as long-term players in the cellular baseband market.

We analyzed this back in May when the original rumour of the Intel/Infineon wireless deal surfaced. Infineon's wireless business is definitely an attractive target for Intel as it gives immediate access to valuable IP and an established customer base. Infineon is a rising star in the W-CDMA baseband market and ranked number two in the W-CDMA baseband market behind Qualcomm (excluding Texas Instruments’ custom baseband business with Nokia). Infineon has so far focused on slim modems and has stayed away from developing ARM-based applications processors. So far Infineon’s niche strategy has paid off, but the time has come for the company to expand its portfolio by offering a wider range of processors to address smartphones, tablets and other connected consumer devices. Although 3G and smartphones are of most interest to Intel, the company is likely to keep Infineon’s 2G business as it provides scale which is crucial to play in the cellular baseband segment.

It will be another year or two before Intel's applications processors are smartphone-ready. Meanwhile, in the next 12 - 18 months Intel can bundle Infineon's 3G platform with all of its notebook and netbook chipsets and gain significant 3G share to undercut Qualcomm and ST-Ericsson's non-handset offerings. But both Qualcomm and ST-Ericsson appear to have a two year technology lead over Infineon in chipsets for HSPA+ and LTE; Infineon is expected to introduce its first HSPA+ chipset in 2011 and an LTE chipset in 2012. MediaTek’s grey handset chip business may come under pressure from Infineon in the future if Intel expands its field application engineering force in China. Likewise, Broadcom is expected to come under pressure from this deal but should survive with help from its other businesses such as connectivity and digital home. This acquisition will also likely affect stand-alone application processor vendors such as Texas Instruments and NVIDIA that currently lack their own 3G / 4G modems. But we believe that it will take another 4-5 years for Intel to integrate basebands into its Atom CPU, if at all.

Infineon's acquisition still doesn’t guarantee Intel's success in the wireless handset market and the company's ultimate success in this market hinges on how soon Intel can come up with power-efficient processors that can stand-up and compete against a host of ARM-based processor vendors. On a positive note, Intel appears to be moving ahead of its other chip competitors in the software area which positions it well against ARM-based processor vendors. The company’s strong software expertise could help it to gain some OEM mindshare. Intel’s uninspiring track record in the wireless market during the last decade suggests that the company has to execute flawlessly this time to make it successful and keep Infineon’s wireless business as independent as possible. Clients can read our eight page analysis of the Intel/Infineon deal here.

Renesas has been trying to improve its global reach with its SH-Mobile G Series of application processors. The fourth generation SH-Mobile G processor, SH-Mobile G4, will support HSPA and is expected to be available in 2010. Renesas' SH-Mobile G series processors (integrating the FOMA baseband technology of NTT docomo) support OSs such as Symbian and Linux and are ARM-compatible, unlike the company's stand-alone apps processors. While Renesas is a prominent supplier in markets for apps processors, RF transceivers and power amplifiers, it is only a minor player in the cellular baseband processor market. Renesas doesn’t have its own baseband technology and has collaborated with the NTT docomo to design the SH-Mobile G Series chips.

Competition in the global W-CDMA chipset market is already high and tier-1 handset vendors already have established relationships with other leading chip suppliers. If Renesas can attain any high volume tier-1 global vendor for its SH-Mobile G basebands it could definitely help its long-term ambitions. But so far there are no publicly known SH-Mobile G baseband design-wins outside Japan and Korea.

In April 2009 Renesas announced merger plans with Japanese chip vendor NEC Electronics. Unlike Renesas, NEC Electronics has its own baseband technology and it remains to be seen how Renesas will leverage NEC’s baseband expertise. The planned merger with NEC Electronics is not expected to contribute much to Renesas’ global baseband presence given that NEC Electronics is also focused on the Japanese market. To read more about our thoughts on Renesas, see our recent profile on the company here.

Sravan Kundojjala