SAN FRANCISCO—News this week that Texas Instruments plans to refocus its successful OMAP applications processor to target embedded applications—all but abandoning future smartphone and tablet sockets, despite some notable design wins—caught many people off guard.
But not Will Strauss, principal analyst at Forward Concepts Inc. Back in November 2010, Strauss identified the trend that would lead to TI's strategic shift, and wrote about it in his monthly newsletter—the future of applications processors involved integrated baseband, and TI had a decision to make.
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Back then, Strauss reported that OMAP was the leader in 3G cell phone apps processor shipments, but that Qualcomm was already nipping at its heels with the Snapdragon communications processor, which offered both an applications processor and cellular modem on the same die. Strauss predicted that combo chips that integrated both apps processor and modem would make up nearly three-quarters of applications processor shipments by 2014.
TI had already all but exited the cellular modem business, pledging only to continue shipments to Nokia. Now TI had to make a choice—jump back into cellular modems with both feet in order to remain competitive down the road with OMAP for smartphones and tablets, or prepare to change strategies.
Strauss, pointing out that Intel had recently bought its way back into the cellular baseband market by acquiring the wireless chip unit of Infineon, noted that Nvidia was in a similar situation—Nvidia had the promising Tegra apps processor, but no baseband.
"Both companies [TI and Nvidia] are big enough to buy one of the few remaining modem houses, should they decide to take that route," Strauss wrote at the time.
Strauss singled out Icera Semiconductor as the most attractive modem maker left. Nvidia bought Icera for $367 million a few months later. TI, having tired of the baseband business after being undercut on price by MediaTek and others, had no intention of reversing its field.
And the rest is history. While Intel and Nvidia were willing to ante up to add baseband capability as table stakes to get into the game for future smartphone and tablet sockets, TI choose the low road. Nvidia is now offering both Tegra and the Icera baseband chips, and plans to start shipping a version with both integrated on the same die next year. Strauss believes Intel will ultimately put either Atom or a successor on the same die with the baseband, but he suspects it won't happen until at least 2014.