SAN FRANCISCO—Texas Instruments Inc. said Wednesday (Nov. 14) it will cut about 1,700 jobs worldwide as part of a previously disclosed plan to re-target R&D for its OMAP product line at the embedded systems market, away from smartphones and tablets.
Executives from TI (Dallas) said in September that the company would shift its R&D investment on the OMAP applications processor to focus on the embedded market, where they said the product line has an opportunity to capture a greater share of what it estimates to be an $18 billion market.
The announcement that TI would refocus OMAP caught many off guard because the product had notched a number of high-profile design wins. But analysts, particularly Will Strauss of Forward Concepts, said the trend in smartphones is toward integration of the applications processor and baseband processor—a trend TI can't keep up with because it began phasing out its baseband technology years ago.
At the time, TI also noted that Apple Inc. and Samsung Electronics Co. Ltd.—which together dominate the smartphone and tablet markets—design their own applications processors, leaving less of an available market for OMAP to compete in.
In an interview following TI's announcement Wednesday, Strauss said he was expecting TI to cut jobs after changing course with OMAP.
"We knew the hatchet was coming down. It had to," Strauss said. "They had a bloated operation there for the reduced market that they were facing."
But Strauss—who said he was certain TI explored the possibility of selling all or part of the OMAP division prior to Wednesday's announcement—said he was surprised by the number of jobs eliminated. "TI's way is usually more subtle," Stauss said. "But then again, we've got an overall market that is headed down right now."