The mobile and tablet market can be a money maker for some and a deal breaker for others. For Freescale, it seems to be the latter, with the firm choosing to discontinue its high end i.MX 7 mobile processor line, in favor of lower powered chips aimed more at the internet of things.
Rumors have been swirling for weeks that Freescale would be scaling back on its i.MX roadmap, though the firm itself vehemently denies planning to get rid of the product line entirely.
Communications Manager for Freescale Rob Hatley said the confusion may have resulted from the fact that Freescale recently announced several changes after an “extensive, strategic review of the business,” but said the firm continued to support the i.MX line and see “strong acceptance for this portfolio.”
Hatley said Freescale was simply sharpening its focus, but admitted that “unfortunately, there are some employees who will be affected by these changes.”
Freescale itself is not disclosing the specific numbers of layoffs, but a recent report in Israel’s Globes business news said the firm’s local division was laying off “100-200 of its 500 employees.”
Globes said those layoffs were centered around two departments - the DSP department and the multimedia chip department (which includes i.MX 7). Sources have also claimed AMD has hired the team Freescale let go in Israel to take a run at the high end SoC app processor market, though those rumors have yet to be confirmed.
Freescale’s strategy shift does make sense. In an industry already over served with strong ARM processors, there is precious little market to go around for more than just the top players.
Even Texas Instruments recently admitted this by realigning its OMAP strategy, in similar fashion to Freescale.
Development costs for the high end chips run into the tens of millions of dollars for players serving the high end market, which has led to a situation where only around four top players can compete and justify the cost,
Nvidia, Qualcomm, Samsung and Apple have managed to carve out the most lucrative niche of the high powered mobile processing market, leaving smaller players to fight over the scraps.
Freescale also continues to be massively burdened by debt, much of it incurred from the high R&D costs it has needed to try to keep pace.
The firm’s new strategy seems to be a more viable one, honing in on the higher volume, lower price chip market for the Internet of Things.
“Freescale’s i.MX 6 product line has been extremely strong, with a broad array of design wins secured with leading manufacturers across a range of application spaces,” Hatley said.
In short, sometimes you have to amputate a finger to save the hand.
Mobile. It’s a great market to be in if you’re a winner, a terrible market to be in if you’re not.
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