SAN FRANCISCO—Executives from Texas Instruments Inc. said Tuesday (Sept. 25) the company would shift its R&D investment on the OMAP applications processor to focus more on the embedded market and less on smartphones and media tablets.
OMAP has been successful in securing design wins in smartphones and tablets, including Motorola Droid handsets and Amazon's Kindle Fire tablet. But, faced with stiff competition from the likes of Qualcomm Inc. and Nvidia Corp., TI executives have said the fact that market leaders Apple Inc. and Samsung Electronics Co. Ltd. use their own internally designed processors makes the mobile market less attractive.
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"If you look at the dynamics in that market, you look at it being dominated by a couple of players, you look at the fact that vertical integration has become a very significant factor in the marketplace, the truth is that it's just a less attractive opportunity for us," said Greg Delagi, TI's senior vice president for embedded processing, in a presentation to financial analysts Tuesday.
Greg Delagi, TI's senior vice president for embedded processing, speaks at the company's analyst day Tuesday.
Instead, Delagi said, TI plans to re-profile its R&D investment to focus on the embedded market, where he said the company could bring OMAP and its connectivity technologies to a much broader set of customers serving applications like industrial automation, automotive and the "Internet of things."
"We have a lot of work to do to re-profile the investments that we've got as we shift our focus from our historical space in wireless and smartphones and tablets and focus on the embedded area for both OMAP and connectivity," Delagi said.
In the embedded processing space, TI's OMAP and connectivity solutions generate about $400 million in revenue annually from a base of about 4,000 customers, Delagi said. In smartphones and tablets, OMAP and connectivity chips generate about $900 million from roughly 10 customers, he said.
Delagi said TI currently ranks second in sales of embedded processors with 12 percent market share. "That, by definition, says that there's 88 percent of the market that we still have a chance to grow. It's a huge opportunity for us," he said.