BEIJING, China– Lenovo, the second largest smartphone supplier in China, will get into the chip design business with a special focus on smartphones and tablets, EE Times has learned.
The company, which has maintained a small IC design team consisting of about 10 people over the last decade, is now committed to expanding this team to about 100 engineers by the middle of this year, according to a China-based industry source with direct knowledge of Lenovo’s recruitment of chip designers.
Lenovo will be hiring 40 engineers in Shenzhen area and 60 in Beijing, according to the source, who asked to remain anonymous.
Lenovo, based in Beijing, did not immediately respond to questions about these plans.
This initiative appears to be driven by the company’s desire to control its own destiny in smartphones and tablets--a la HiSilicon at Huawei. (HiSilicon is a chip division of Huawei.)
Unlike Samsung or Apple, Lenovo has a checkered history of adopting different apps processors from a variety of suppliers for its smartphones. The company adopted MediaTek’s MT6573 in the Lenovo A60 smartphone in 2011, while it became the first company--outside Samsung --in 2012 to design in Samsung Electronics’ quad-core apps processor Exynos 4 in its LePhone K860.
Lenovo, however, announced earlier this year a 5.5-inch smartphone, dubbed K900, by integrating Intel’s first dual-core Atom chip for phones. The Atom Z2580 is said to have roughly doubled the CPU performance of Intel’s single-core Medfield processor used in Lenovo’s K800 phone, which was introduced a year ago.
While Lenovo might have been enjoying its freedom in choosing the best apps processor available on the market, reality bit hard, sources said, when Samsung Electronics refused to supply its newest version of the Exynos apps processor to the Chinese company.
Market share of the top five vendors for China’s
smartphone market in 2012
Source: Strategy Analytics
Indeed, on the growing Chinese smartphone market last year, Lenovo became Samsung’s biggest rival--with Samsung holding a 17.7 percent share, with Lenovo at 13.2 percent and Apple at 11 percent.
Meanwhile, Lenovo has been beefing up its senior management team to prepare itself to become a leading consumer electronics vendor.
The world's second-largest supplier of personal computers last month (February) named Jerry Yang, the co-founder and former CEO of Yahoo, as a "board observer.” Further, Lenovo added Tudor Brown, one of the founders of ARM, as a non-executive director to Lenovo's roster of seasoned veterans.
It’s far from clear if an internal group of mere 100 IC engineers can make a dent in the already crowded apps processor market. And yet, as Shao Yang, CMO of Huawei Device, recently said in an interview with EE Times, having a chip division of its own could help [the handset company] “negotiate better with other semiconductor companies.”
True, it's all about product differentiation! These days there are not many choices for HW/SW vendors, it's same parts from same semiconductor companies, same SW/OS from same vendors. It's going pressure on pricing as there are no key differentiating factors across the OEMs. This is where Apple has an Advantage, where there is no comparison and it demands premium for it's products. It takes pains to be another apple, we it may be worth trying with innovative thinking!!
The don't necessarily need to differentiate in the hardware. The fact is that today they buy the app. processor from other manufacturers. All they need is to be able to produce their own so that the situation they have with Samsung will not repeat. If they have such a large market share they must be doing something right, so copying others on the hardware as long as it will be theirs could be OK.
Everything has it's time and season including business strategies. What's old becomes new again. Gotta love this industry because it makes reinventing itself every 10 years a mantra regardless if logical or not.
For smartphones and tablets, I think the space is too crowded to differentiate through hardware. If Lenovo really wants to differentiate software is a better way - especially if they plan to spend as much money as on a hardware design division.
On the other hand, I am wondering if the chip they are planning to make is not based on ARM but rather on china's home grown processors (similar to MIPS). That would be something totally different.