Chipmakers must catch up with convergence

Chip manufacturers such as Intel, Qualcomm and Advanced Micro Devices (AMD) have all recognized the need to move away from focusing on one product category, and start building a wider portfolio of products to address IT consumerization and convergence trends.

How fast they do so will determine how successful they are, going forward, in executing this change in business strategy.

John Stefanac, president of Southeast Asia and Pacific at Qualcomm, said the world is changing in which traditional devices people use and functionalities these devices perform are converging. The amount of computing power in smartphones today has provided functions once the sole domain of PCs, he noted.

AMD spokesperson Michael Silverman added fundamental changes are occurring across the PC industry, brought on by three main things: consumerization, cloud computing, and convergence.

Referencing CEO Rory Read's statements made during the chipmaker's recent third-quarter earnings call, Silverman said convergence refers to the coming together of data, applications and form factors across any device or ecosystem to drive the demand for content anytime and anywhere.

"This will be independent of past instruction sets or operating system barriers. Data and applications will be seamlessly driven from the cloud to any smartphone, tablet, PC, television or appliance," he said, adding AMD had seen these trends coming and had been restructuring the business to capitalize on them.

Stefanac also pointed to the development of machine-to-machine (M2M) communications, also known as the Internet of Things where people and machines connect and communicate with each other, which is driving the development of different devices and categories.

"From utility meters and cars, to medical diagnostic equipment and mobile commerce solutions--everything will be connected," he said. "This trend reflects the increasing diversity of devices and their requirements in capability, ultimately presenting manufacturers incredible opportunities in developing products and solutions for multiple segments and functionalities."

Leighton Phillips, director of product management and pricing at Intel Asia-Pacific, echoed similar sentiments. He said an ecosystem of mobility and multiple device ownership continue to thrive, and is driving the chips industry to innovate and deliver a richer, more immersive user experience for consumers and businesses through a spectrum of devices.

These devices not only need to be able to offer high performance, they also must have low power consumption to enable a mobile lifestyle.

Phillips said: "Intel has long acknowledged the trend as we extended the benefits of Intel architecture to a whole new range of devices across the compute continuum--from traditional PCs and servers to tablets, smartphones and intelligent devices."

He added the chipmaker's fourth-generation Intel Core processor, codenamed Haswell, will herald the arrival of system-on-chips (SoCs) on mainstream PCs. This will further blur the boundaries between what the industry identifies as a PC and a mobile phone, he noted.

Haswell is poised to be a gamechanger for Intelwhen it hits the market early-2013, given this is the first time Intel has attempted to bridge so many devices--from mobile devices to desktops, and eventually high-end servers--with a single architecture.

Mobile market too hot for some to handle

However, the highly competitive mobile landscape is proving too much for some chipmakers to continue investing in the market.

Stefanac said Qualcomm's focus now is on differentiating itself from other manufacturers by tapping the expertise and resources across its various business areas, and providing a unique proposition for its customers.

This breadth of businesses range from mobile processors and modem design, to WLAN (wireless local area network), M2M, augmented reality, and mobile health, he noted.

From a device enablement standpoint, however, Qualcomm will be moving past smartphones, tablets and PCs, and into adjacent categories, he said. For instance, its Snapdragon S4 Prime range of mobile processors aims to power the next wave of smart TV experiences by bringing full Web browsing capabilities to television devices.

In other words, its emphasis will not be on mobile devices.

In the near future, Stefanac added, Qualcomm hopes to see its products in cars, utility meters, medical diagnostic equipment, among others.

Texas Instruments is another chipmaker that will be watering down its involvement in mobile devices. The company in September said increased competition and declining market opportunities meant it will not be as enthusiastic in investing in smartphones and tablets going forward, choosing instead to focus on churning out embedded chips for industrial clients.

Greg Delagi, senior vice president for embedded processing, said then: "We believe that opportunity is less attractive as we go forward."

AMD, however, is going the opposite direction, and choosing to extend its reach in the mobile devices segment as it diversifies beyond the traditional PC market.

Silverman said the company's goal is to rebalance its business toward faster growing market segments such as ultraportables and ultra low-power devices--machines in which its accelerated processing units (APUs) are suited for.

"We'll accelerate our ability to do this primarily by building reusable intellectual property blocks that will help lower development costs and improve our speed to market," he said.