Intel, Qualcomm: the mobile market under assault

The much disputed territory of mobile machines is much coveted by electronics component manufacturers. The two US giants, Intel and Qualcomm, are jostling for position, certainly not holding back when it comes areas dominated by the other side. Their common objective? To make the most of the lucrative opportunities offered by convergent products and gain a presence under the hoods of smartphones, notebooks, smartbooks, tablets, netbooks and other MIDs.

While each company has the same aim, they have different strategies and different tools of war. In one corner, Intel aims to roll its PC knowhow out into smaller devices. In the other corner Qualcomm is betting on diversification, to the point of creating a new market segment.


The excellent growth areas of netbooks and smartphones have the foundaries and manufacturers licking their lips. You have to say that the appetite of users for this type of product is more than encouraging. The smartphone has rapidly become a commercial success on the mobile phone market at the same time as adding value, representing around 35% of mobile phone sales last year and probably around 50% this year, according to the GfK institute. Not always seen as giving sufficient mobility, the laptop is giving way to the more mobile netbook, a welcome arrival with 1.1 million sales in 2009. This represents a significant success for a product that was viewed with a certain scepticism at first. The netbook boom proves one thing: the consumer wants a practical, mobile product with decent performance and extended battery life. So what if it seems to double up on already existing products, such as the smartphone and the PC laptop.


Between these two segments, there are a whole host of devices looking to hollow out a niche for themselves in the shops. One example is the Apple iPad style tablet, and the smartbook, a device that combines the best from smartphones and netbooks. The big players on the market are making their moves and bringing out numerous ranges. Without the right components to drive them however, they’d be floundering, which is where the two big names in the chip and processor market, Intel and Qualcomm, come in. A battle has begun with one casting a jealous eye over the mobile phone sector and the other the ultra-mobile computer.

Intel: the art of russian dolls

Leader on the market of microprocessors designed for computers, Intel is hoping to move into the MID market, armed as it is with the Atom microprocessor that is gradually multiplying and the mini version of which is adapted for ultra-mobile electronic devices. The added value, highlighted by Intel, above and beyond reduced energy consumption on older chip generations (the same refrain from all players on the market), is compatability with all screens owned by a user. Intel is using its experience in the PC world and is betting on a sort of Russian doll strategy: "Ours isn’t purely a smartphone approach. Our cross-platform solution means you can transfer your PC universe onto your smartphone or your netbook and benefit from total compatibility with the world of the internet, without requiring any relay. This is definitely a bonus point both for users who will no longer need to do this work themselves, and operators, who will be able to develop a valid system that is applicable to all devices with a screen", affirms Stéphane Nègre, head of Intel France.

In terms of the smartbook market, Mr Nègre pauses briefly before reaffirming the brand’s positioning: "We're going to continue to develop the netbook and Archos 9 type tablet market. The smartbook is in the "grey zone" (an area of convergence between the PC and the mobile phone, editor’s note), which is still a high risk area. It will perhaps be a success but we’re waiting to see how the market reacts. The netbook segment offers great opportunities for diversification with ever-increasing battery life and 3G on its way." This is an opinion echoed by Lenovo in spite of its forthcoming Skylight smartbook. Ninis Samuel, head of marketing for mobile internet products says: "We don’t expect smartbooks, such as the Skylight, to replace the PC or telephone. We’re going to keep an eye on how the segment is progressing and adapt ourselves to demand".

In the lucrative smartphone segment, Intel has a lower profile than Qualcomm, who have already managed to place their Snapdragon processor in a number of high-end devices. Intel does have its own solution, based on the Atom of course and called Moorestown, but has been less aggressive than its competitor. Is this delay significant? "We’re not actually behind schedule", says Stéphane Nègre. "We have managed to shoehorn a powerful, low consumption Atom into the LG GW900 (presented at CES in Las Vegas at the beginning of the year, editor’s note). As of the second half of 2010, you’ll see several models on the shelves based on this system."

Reading between the lines, though the Intel assault would appear to be less out in the open than Qualcomm’s, what seems to count, in the long term, is how the solution performs. According to Stéphane Nègre: "The difference in performance between our solution and Qualcomm’s is significant". Advantage Intel? This would seem to be what Intel are claiming. In the meantime, Snapdragon is stretching out its lead on Moorestown. To attenuate somewhat for the hardware delays, Intel, world leader in chip sales, is keen to highlight the recent agreement signed with Nokia, world leader in mobile phones, and the recent announcement of the development of Meego, an open smartphone platform "not restricted to Nokia and Intel, but which will interest other operators and manufacturers", Stéphane Nègre tells us. This seems to indicate that the partnership won’t be stopping there and that the Intel chip will soon be powering some high-end Nokia smartphones. Remember, after many battles over patents and royalties, Nokia and Qualcomm also became privileged partners at the end of last year.

Qualcomm: a tranquil but omnipresent force

A misunderstanding linked to the use of not always clear shared licences (or not!) has finally been transformed into a 15-year agreement for the use of Qualcomm technologies by Nokia and vice versa. A sort mutually advantageous pillage, then. This is also an indicator of the weakness of Texas Instruments, which was, up until now, the main supplier of mobile solutions to Nokia and which now finds itself squashed between Intel and Qualcomm. In spite of all the court actions, Qualcomm still seems to be moving forward with confidence. A powerful company, the company’s turnover for 2009 reached the impressive USD 11bn, with profits up 60% (minimum, before accounting consolidation). Since being founded in 1985, Qualcomm has come out with a great number of innovations, patents and advances in the mobile world.

Leader in the manufacture of chips for mobiles, 7th largest foundary on the planet, this American company has succeeded in building close, "impassioned" relationships with manufacturers… and competitors. The run-in, cleverly turned into a partnership, with Nokia is the most recent but Samsung is another example (a difference over patents that lead to a USD 1.1bn contract). In terms of its competitors, MediaTek, no.1 foundary in China, is attacking Qualcomm front-on in Asia, but pays some of its royalties to Qualcomm due to the use of certain licences in the manufacture of their own chips. In these various relations Qualcomm has shown proof of a real mastery of the art, somewhat mirroring Intel’s methods in the PC sector.

Well ensconced in the mobile phone segment, Qualcomm has operated an ambitious change in direction in terms of marketing and technology over the last two years: to create a brand out of its name as a foundary and take over the innards of a multitude of mobile communications products. Except netbooks.

Qualcomm isn’t interested in netbooks. Instead, it’s trying to push its own take on the mini computer, which it believes should be permanently connected. This is the tone adopted for its new smartbook. "With this product, we’re addressing a section of the population looking for evolution in mobile platforms. A smartbook differs from a smartphone in terms of form, but mailing use, push, RSS and applications are the same", explains Pierre Steiblen, head of Qualcomm France, even if he admits that the product’s future is still unconfirmed. With two partners, Lenovo and HP, and several products in the pipeline, Qualcomm seems fairly serene about what’s to come. After all, the foundary has rapidly become niumber one in the world for chips for mobile phones, without even having equipped a Nokia yet (still the world leader in volumes). The legitimacy of the smartbook would seem to be slightly harder to establish however, especially as netbooks, cut to the quick by Qualcomm, look as if their capacities in 2010 are close to what Qualcomm is offering with the Snapdragon. They are taking a risk here as the similarity of these products could well be a disadvantage in terms of extending the life of their concept. And what should we make of HP’s reaction who, in spite of the noisy announcement of the Airlife 100, no longer wishes to make any comment on the smartbook concept?

Snapdragon (a flower with many sides, not a legendary animal), Qualcomm’s major machine of war, is turning the heads of manufacturers. It’s a chip that simultaneously manages the OS (computer or mobile) and communication with the network, all at remarkable speeds.

Snapdragon has naturally become part of the smartphone hype with 15 manufacturers and around 40 products in 2010, of which the Google/HTC Nexus One, the HTC Desire and HD2 and the Acer Liquid. An architecture which can handle all aspects of the smartphone and puts Qualcomm in a position of strength opposite Intel, while waiting to see what the Moorestown is capable of. It’s interesting to see that Snapdragon is the first Qualcomm ARM chip to be branded. It’s a technology being sold like a product, a vector or popularity for Qualcomm and a stamp of quality for manufacturers who have decided to place the logo on the packaging of certain smartphones.

HTC HD2

So does the firm fear Intel’s arrival on its territory? "This is what it’s all about," says Pierre Steiblen "competition stimulates creativity and the market." In response to Intel’s arguments with respect to the inter-compatibility of mobile technologies, he says: The chips currently equipping high and mid-end smartphones with convergence technologies are Qualcomm chips, and no intercompatibility concerns have been raised as yet". Above and beyond the shadow cast by Intel, some manufacturers, such as Samsung with its Wave (Bada), have entered the game with their own in-house 1 GHz mobile phone processors. Again Qualcomm qualifies this as healthy competition. And anyway, everything will change again soon as Snapdragon derivatives will soon be appearing. "We're planning to release a 1.3 GHz chip before the end of the first quarter, but above all, we’re setting a great deal of store by the version after that, clocked at 1.5 GHz and dual core," says Jean Varaldi, head of the components section.

Qualcomm’s other strength is diversification in terms of exploitation of its components. What's more it achieves this without spreading itself too thin due to an R&D budget of around 30% of turnover. You’ll find Qualcomm wherever you find mobility. With BREW Mobile, the American company possesses the perfect arm to move into the entry-level smartphone segment. An OS platform, reliable and low cost, able to run Android without any problems, AT&T are already counting on using BREW for the US market later this year. The US is moreover where Qualcomm pioneers the use of many of its mobile solutions. Over the last 2 years, it has been developing its mobile TV MediaFlo network.

This has been a veritable success among both operators and users, to the point of encouraging Qualcomm to launch FloTV terminals, specially designed for mobile TV. While mobile TV still hasn’t established itself in the UK and there is an appetite for it among users, "The situation is less complicated in countries such as Japan, where discussions around the use of MediaFlo are moving forward well," concludes Pierre Steiblen.


Qualcomm could also soon be popping up on the electronic book market via its Mirasol technology (see inset) and in Audi cars as part of a continually connected system. All this represents a lot of markets, a sort of spider’s web that surrounds the other players. Slowly but surely, Qualcomm has taken pride of place in the mobile world. Taking a long term view, it’s hard to see where Qualcomm’s influence may extend to on the industrial and commercial landscape. Note that royalties don’t simply result from the use of a component but also from the sale of a product using that component.

The mobile component war is underway then and could prove very interesting, especially when you look at the colossal forces at work coming from the PC and mobile communications worlds. It’s over to Intel to rise to the challenge! Qualcomm is waiting serenly, chip in hand.

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