Since 2011, essentially two brands have dominated the global tablet market. One is Apple, and the other is the so-called white box. (Of course, Samsung joined the fray last year.)
Rockchip, a Chinese designer of ARM-based SoCs, has not only rocked China's white-box tablet market but also dominated the global market for the last three years, along with its dancing partner (or, more accurately, its biggest competitor) Allwinner, an app processor company based in China.
Since Taiwan's MediaTek entered the white box market last year, however, everything has changed. Cost, design house, supply chain -- competition is everywhere. Further, MediaTek's communication modem technology has become the biggest threat to Rockchip and Allwinner in the tablet market.
So Intel's decision to enter a strategic agreement with Rockchip is a big deal -- not just for the two companies involved, but for everyone in the global tablet market. Intel said in a press release that the arrangement will "expand the breadth of and accelerate the rate at which [Rockchip] brings its Intel architecture and communications-based solutions to market for a range of entry-level Android tablets worldwide."
From what I gathered from the announcement and from discussing the matter with China's industry insiders, we know Intel and Rockchip have agreed on three points:
- Rockchip will get an X86 architecture license from Intel and will develop X86-based SoC for midmarket and low-end tablets. According to the announcement, the first quad-core SoC (in the Intel Sofia family) will be launched in the first half of 2015.
- Rockchip will license from Intel its 3G modem technology -- a rare commodity among China's application processor vendors.
- Rockchip will get 14-nm capacity support from Intel in the near future.
What's in it for Intel?
Intel gets four main benefits from this deal:
- It can enter the midmarket and low-end tablet market (dominated by white box vendors) using Rockchip's market experience. In 2013, China application processors accounted for 40% of the global tablet shipment, and one third of it came from Rockchip.
- Rockchip, with its intimate knowledge, excellent resources, and close relationships with design houses, can help Intel build a new X86 ecosystem in the tablet market. In fact, Intel has collaborated with Chinese design houses since the beginning of this year. Its R&D engineers are providing full technical support to design houses such as Emdoor, Techvision, Wisky, and Hampoo, which are partners of Rockchip.
- The deal will help Intel fill up the 14 nm capacity in the near future.
- If the relationship with Rockchip goes well, it could create a chance for Intel to enter the smartphone market.
But there are also uncertain factors for Intel. For starters, Intel and Rockchip have different corporate cultures, different operational modes, and most importantly, different missions. With their diverging views and understandings of the market, communicating their goals and their mission of collaboration smoothly will be the biggest problem.
Next Page: What will Rockchip gain?