Intel, ARM and the Netbook

I have been gung-ho about the new application areas that the Atom processor managed to penetrate/create – low power, “low cost” and pentium strength processing capability in the embedded domain. Most important was x86 compatibility, which meant I could write code on my regular notebook and instantly deploy it on an Atom device. Smart segmentation of the market by Intel.

Netbooks that are based on the atom processor have undoubtedly been the surprise segment for almost everyone in the industry. Asus needs to be commended for being the first to push this in the market and have been deservedly rewarded. According to Forward Conepts – ” The 3G Netbook category is going to demonstrate 124 percent compound annual growth rate (CAGR) reaching 34 million units in 2014 and a 45 percent 3G/LTE attachment rate” . There is little doubt (save in Steve Job’s mind) that this is going to be a huge opportunity.

Its not just netbooks but other devices that have begun to use the Atom processor – nettops like the Asus eee box and the Acer Aspire Revo have appeared on the scene. With internet video being the next  frontier there is a glut of devices trying to bring this video from the internet to television. Imagine the speed with which you can now build the app and deploy it on one of these boxes.

ARM devices about a year back were still underpowered and were confined to either smart phones or other embedded tasks. It was not that some of these ARM based SOCs couldn’t decode HD video. In fact many of them could. It was a problem of internet compatibility. The internet has grown on Wintel platforms – websites, browsers and applications were all built to cater to this segment. Adobe’s Flash had also grown to be the platform of choice for graphics and video on the net. When intel launched the atom this was their big differentiator- compatibility with the web. Over 75% of all internet video is built on Flash.

Flash 10 is a MIPS hungry platform and requires OpenGL ES 2.0 and OpenVG 1.1 support. The ARM SOCs were not ready with this support. Intel rode the wave and reaped the benefits of the early mover advantage…with significantly high margins (Intel’s last earnings call pegged margins for 4th quarter this year to be in the high end of the normal range which intel defines as 50-60%). The flip side of this was that Atom based devices were priced much higher than ARM based ones. Many vendors didn’t have a choice and just went with the price or decided to go for sub-optimal implementations based on ARM.

Intel’s honeymoon may soon be over if the ARM based silicon vendors are to be believed. Adobe started the Open Screen Project to work with silicon vendors to port Flash 10 & Adobe’s AIR to their SOCs. This is beginning to come to fruition now with a few players announcing support for Flash.

Marvell, Broadcom, Sigma Designs, Freescale and most recently Qualcomm have announced Flash support. The most significant amongst these announcements seems to be Qualcomm’s see (Qualcomm demos Adobe Flash 10 on ARM-based netbook). Not only do they support full high definition flash but have also upped the processor clock to 1GHz. ARM parts have the big advantage of being very miserly on their power consumption and this can be a significant differentiator in the mobile space. This includes smart phones, netbooks, smart books, tablets and the like.
More importantly companies like Qualcomm have longer standing relationships with operators who are a crucial piece of the value chain when it come to mobile broadband delivery. The fastest way for mobile broadband to grow is to subsidize the device in exchange for guaranteed monthly subscription fees.
Qualcomm announced it is sampling its first chipsets for dual-carrier HSPA+ and multi-mode 3G/LTE recently. According to Qualcomm its smarphone chipset dubbed MSM7x30, supports high-definition video recording and playback, has dedicated 2D and 3D graphics cores and is optimized for Web usage. Qualcomm can hence become a formidable rival to Intel in this next generation of devices that go beyond the PC.

Of course Intel is not going to take this challenge lying down. On June 23rd of this year Nokia and Intel announced a deal where Nokia will license 3G and HSPA technology to Intel (see Intel, Nokia exchange wedding vows). And in October this year there was this announcement – AT&T Nokia booklet 3G pricing & release date confirmed. This netbook is powered by an Atom Z530 and has a 3G modem. Its available for $299 if you sign up for a $60 per month data plan or $599 unsubsidized.

The last chapter in this saga is far from over. Exciting times ahead for this space and it can only be good for the consumer.

As always, stay tuned….

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3 Comments to “Intel, ARM and the Netbook”

  1. As a developer who hates the complexity of the x86 platform and as a consumer who hates the ever-growing dominance of Intel, I welcome these changes.

    But, Atom still has some strong points in its favor. Intel has been dropping the price frequently. And the new passively-cooled Atoms (N270) consume far less power than the initial versions. Beyond a certain level, the amount of power consumed by the processor does not matter much (because the system’s TDP dominates over the processor’s TDP).

    So, my only gripe with Atom now is the x86 architecture.

    • Well Intel will move from 45nm to 32nm and then further down to 22nm. This will definitely bring the power down. That being said using IBM’s or other technologically advanced fabs the fabless ARM SOC group can also move to these deep sub-micron nodes. So, that on its own cant be a winning proposition according to me. How fast they will be able to catch up with Intel in this area is another story.
      As an entrepreneur I do believe in the flexiblity of prototyping, testing and running on a PC before trying it all on an embedded device. The set up time and the vagaries of the hardware soon dominate and distract you from your main task.
      The added ability to quickly move the proto to an embedded platform is a huge upside to using the atom. Time to market advantages cant be ignored.
      Now with the whole RIA movement, frameworks like AIR do help in making your app platform agnostic. The problem till now was this stuff didn’t run on ARM SOCs.
      Now that they do, it will be interesting to see how Intel responds. I would for one like to see them reduce their price points.
      Of course demos don’t necessarily make for production worthy systems, so I would really like to test this on a Snapdragon to see how good the performance is compared to the Atom.
      That being said one thing is for sure Intel is not fighting to dominate this space but to find a footing. I will be really surprised if they are able to dominate this space.

  2. If either Intel or its competition brings down the price point to a level where I can build a OTT STB with Adobe Flash + AIR capability + ethernet for $99 (and + HDD + WiFi for $149), I’d be very excited.

    CE is a different game altogether and good to see Intel trying to fight for a foothold here.

    If I were ARM/MIPS, I will be very scared of Intel, quicken innovation and double/triple my R&D spend just so I do not lose too much CE market share (instead of hoping for monopoly laws to bail me out).

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