How Texas Instruments' decision to pull out of the cellular baseband business determined the future course of its apps processor.
According to Strauss, the inevitability of re-focusing OMAP has been a foregone conclusion by at least some people within TI for some time. In his remarks on the strategy earlier this week, Greg Delagi, TI's senior vice president for embedded processing, stressed that the company had been shifting R&D investments in OMAP for several years in preparation for this move. He insisted that TI had not been caught "flat-footed" by the market trends.
The primary reason for the change cited by Delgai is also relevant. Apple and Samsung are the dominant players in smartphones and tablets, and they make their own applications processors. That leaves a smaller pie for the likes of TI, Qualcomm, Nvidia and Intel.
But as has been pointed out by analysts and others, that smaller pie is not that small, and TI may suffer as its roughly $900 million in annual revenue from OMAP and connectivity chips in smartphones and tablets declines along with its R&D investment. But, according to Strauss, without the baseband capability, TI wasn't going to be able to hang on to the smartphone and tablet sockets it has for much longer.
"The clear trend is toward an integrated baseband," Strauss said in an interview this week.
This is by no means the end of the line for OMAP. As Delagi stressed, OMAP has a real opportunity to grow share in the $18 billion embedded processor market, where there are many more customers, but smaller volumes. TI can also leverage its strength in analog to improve its position in embedded processing, where the company already claims 12 percent market share and the No. 2 position.
"It's a reasonable market for them," Straus said. "It's really they only approach they've got. That [OMAP] can be a profitable product line. It just won't be a 1 billion unit product line."