The third in a series of round ups of the tech industry's various antitrust cases and related topics, this week's entry focuses on Apple's use of the ARM microchip in its coming blockbuster, the iPad, and how Intel seems to have missed the custom 'System on a chip' (SoC) boat entirely. Also included are a few pieces of interest on Microsoft, Google, and Yahoo! with competition and antitrust being the featured topics.
Intel – Analysis: Intel Faces Challenge In Smartphone Markets As Alliance with TSMC "Fizzles"| SiliconValleyWatcher
Tom Foremski, former Financial Times reporter who currently focuses on "the business and culture of disruption," takes a look at Intel's struggle to compete in the custom microchip market in a recent piece and highlights the failure of the chipfab titan to adapt to a rapidly changing market. Of particular interest is the choice of a competing chip model, ARM, for use in a growing number of smart gadgets, e.g., Apple's iPad and HTC's "Desire" phone.
A year ago, Intel, the world's top semiconductor maker, announced an alliance with TSMC, the world's largest chipmaker.
TSMC, headquartered in Taiwan, makes chips for other companies. It invented the "fabless" chip industry, which is now the largest sector of the global chip market.
In the first deal of its kind, Intel licensed its Atom microprocessor design to TSMC, so that third parties could design custom chips combining Atom, with technologies from many sources. The goal was to provide something similar to the UK's ARM microprocessor design, which is used in many custom chips, such as the A4 found in Apple's iPad.
But this hasn't worked out.
Intel's Atom chip works swell in devices with larger batteries to power its increased energy needs, but falls short in smaller, more complex, tech items such as the latest generation of smartphones. Foremski offers up some thoughts on what lies ahead for Intel if it can't get up to speed on its system on a chip (SoC) offerings, and quick. "Intel certainly has the talent and resources to make future Atom designs that are competitive with ARM in terms of power consumption and size. But the longer this takes, the more design wins for ARM. Once a company is committed to an architecture, it is very expensive to switch to a different one." And Intel even reveals their prospects for grabbing a larger share of the marketplace are are slim, admitting "…that a lack of customer demand has put the partnership
Apple/Intel – For Chip Makers, the Next Battle Is in Smartphones | The New York Times
In her standout, full-length article, Bits Columnist Ashlee Vance digs into Apple's prescient choice of using a bespoke chip based on the ARM architecture instead of trying to make due with the outdated and power-hungry Intel Atom processor. Chip manufacturers are gearing up for an all-out Armageddon over market share in the rapidly growing SoC market and expect there to be casualties along the way. Vance details the battlefield for the gentle reader:
…[T]he chip wars are about to become even more bloody. In this next phase, the manufacturers will be fighting to supply the silicon for one of the fastest-growing segments of computing: smartphones, tiny laptops and tablet-style devices.
The fight pits several big chip companies — each trying to put its own stamp on the same basic design for mobile chips — against Intel, the dominant maker of PC chips, which is using an entirely different design to enter a market segment in which it has a minuscule presence.
Consumers are likely to benefit from the battle, which should increase competition and innovation, according to industry players. But it will be costly to the chip manufacturers involved.
Due in part to Apple's choice of a main processor based on the ARM model for the coming iPad touch-based tablet computer, Intel is trying to play catch up as quickly as possible but has some stumbling blocks to deal with first. More information on Intel's struggle from Vance:
…Intel is about to enter the phone fray, both to expand its market and defend itself against the ARM chip makers. Its Atom line of chips, used in most netbooks and now coming to smartphones, can cost two to three times as much as the ARM chips, according to analysts. In addition, the Atom chips consume too much power for many smaller gadgets.
But with 'deep pockets' and a long history of chip market domination, Intel shouldn't be counted out just quite yet but they certainly are spending a lot of time on the canvas these days and are rapidly approaching the need for the cut man to step in and do some triage.
Microsoft on Google – Microsoft CEO: Google merits regulatory scrutiny | KVAL.com
Earlier this week, Microsoft CEO Steve Ballmer sat down to have a chat with reporters during a search engine conference and clearly noted his intentions to "keep the regulatory heat on Google" to help increase Microsoft/Yahoo!'s own search market share. Michael Liedtke reports:
Ballmer said Microsoft believes Google Inc. has done things to gain an unfair advantage in the Internet's lucrative search advertising market. He didn't specify the alleged misconduct.
"We are expressing some of the issues and frustrations we see" with antitrust regulators, Ballmer said. "Sometimes (it's) unsolicited, sometimes because we have been asked."
Google declined to comment Tuesday. But it has said its actions are aimed at providing better experiences for Web surfers and advertisers.
This is not the first time in recent memory that Microsoft has attempted to turn up the pace and aggressiveness in pursuing legal means to crush Google's search engine dominance.
As part of its efforts to challenge Google, Microsoft has sought help from Twitter and Facebook – two popular services for sharing information and photographs.
Microsoft, like Google and Yahoo, pays an undisclosed sum for better access to Twitter's index of short messages. In a bigger partnership, Microsoft spent $240 million for a 1.6 percent stake in Facebook and processes search requests on that site.
Responding to questions, Ballmer played down the possibility of Microsoft buying Twitter or Facebook, which are both privately held.
The search engine crown is firmly held by Google but Microsoft is eagerly beavering away at any small fraction of the marketplace they can gain by almost any means necessary. With Google being accused of unfair and monopolistic practices in the European Union, Microsoft's previous experience navigating such lawsuits might come to its rescue and help them eventually increase the role their proprietary Bing search engine plays in bringing in the hits. For some reason, all I can think about after reading Liedtke's piece is something about pots, kettles, and the color 'black'…
Google – Google antitrust probe – Why Microsoft should sell Bing to Yahoo!| 4sysops.com
Microsoft has some garnered a large number of supporters for its claims of Google's "unfair" search engine ascendancy, including the likes of Michael Pietroforte, who writes up his ideas on why Microsoft should exit the search business altogether to focus on their core business, the Windows family of operating systems. Here's the meat of Pietroforte's riposte:
I always wanted to address this topic because I never liked Microsoft becoming a player in the search business. First, it appears to me that Microsoft’s top management neglected their core business by focusing on Google as their major competitor while others, most prominently Apple, had an easy play. This is the only explanation I have for the two most severe management mistakes in Microsoft’s history:
The Vista debacle was not at all about technical issues of the operating system. Technically, Vista was Microsoft’s greatest achievement since Windows NT. Vista is perceived by many as a failure only because the Windows ecosystem wasn’t prepared for this major update. There was enough time between Windows XP and Vista for Microsoft’s management to prepare business partners. But it appears that they hopelessly underestimated the importance of this task. Since they are all very smart people, it can only be because they were distracted by pondering why on earth they can’t beat Google.
The second big management mistake was neglecting Windows Mobile. How can a nobody in the smart phone business, like Apple, make a fool of all the major players in this market? Was it really so difficult to see that you can’t just run a slim version of Windows on a mobile phone?… And if all those resources that were bound up in hunting Google were focused on Microsoft’s core business – that is in creating and managing software ecosystems – it wouldn’t have been a big deal to come out with a really cool smart phone OS long before a couple of Cupertino guys were able to hack together the iPhone OS.
Search engine market share, Pietroforte suggests, is just the type of shiny object that mesmerized Microsoft's Redmond, Washington executive geniuses and caused them to neglect the very thing that made them the software giant they are today: Windows. Closing with an assertion that Google is indeed a monopoly, the author urges Microsoft to cut lose the burning ship of Bing and get back to its roots. Good advice? Only time will tell.
Intel – Apple's iPad: trouble for Intel's mobile push? | Reuters
Ian Sherr's timely story offers additional evidence of Intel's struggle to adapt to a fluid and difficult smart device environment, including gems like this:
While Apple likely will not market the chip publicly, analysts say the new processor underscores how rival chip designs may eventually win out over Intel Corp's designs in the emergent hot category of mobile devices like smartphones and tablets.
Intel says the first smartphones using its chips go on sale by 2010's second half, as it tries to stake out a corner in the wireless market and replicate what it did for the formerly red-hot netbook category it now almost completely dominates.
But analysts point to an uphill battle against Nvidia Corp, Marvell and Qualcomm Inc, already making headway with cheaper, low-power processors based on designs by ARM Holdings PLC.
Intel is very heavily invested in the aging x86 chip architecture, which is holding back necessary and vital R&D efforts to bring down both the cost and power usage of its rival chip, Atom. "If you look at the stuff Intel's put out there at previous press events and developer forums, you see mobile Internet devices that are kind of clunky, really thick, low-battery life type of devices," [Wedbush Morgan analyst Patrick] Wang said. "They've been worried." As far as Apple's choice to go with their custom ARM-based chip, known as the A4: "'If it's a reminder that Intel is not ready for this kind of prime time, it is a sign that ARM is upscaling,' said IDC analyst Shane Rau. 'It's a sign that the ARM ecosystem is executing.'" Will Intel be able to turn its titanic x86 chip towards the New World of smartphones in time to avoid a collision with the looming iceberg of SoC irrelevance? Tune in next week to find out more!