Google (NASDAQ: GOOG) unveiled Tuesday two new low-cost Chromebooks that will make the Google laptop platform much more competitive against the low-end Windows laptop space.

The two Chromebooks are from Hisense (SHA:600060) and Haier (HKG:1169),two China-based OEM/ODMs known best for providing budget electronics to specific retailers. Both Chromebooks are priced at $149 and are powered by the quad-core Rockchip RK3288 SoC clocked at 1.8GHz.

Each laptop is virtually identical with 11.6-inch LED-backlit display, 2GB of DDR3L SDRAM, 16GB of eMMC flash storage, and a 720p webcam. The only difference between the two is battery life.

First up is the Hisense Chromebook, which will be exclusively sold at Walmart (NYSE: WMT). It promises 8.5 hours of battery life. It’s 0.6 inches thick and weighs 3.3 pounds.

The Haier Chromebook 11, an exclusive to Amazon (NASDAQ:AMZN), has 10 hours of promised battery life.

What’s in a Rockchip?

Rockchip is probably best known for its deal with Intel (NASDAQ: INTC) to bring x86 to the next-generation of cheap tablets for the Chinese market.

Aside from that Rockchip is a fairly run-of-the-mill low-end ARM (LON: ARM) manufacturer that would one day like to challenge the incumbents such as Qualcomm (NASDAQ: QCOM) and MediaTek (TPE: 2454).

The Rockchip RK3288 has four 1.8 GHz ARM Cortex A17 cores and a quad-core ARM Mali T760 GPU.

Benchmarks on the RK3288 are scant, but one from January from a firm called CNX Software shows that its around 18% faster in Antutu than an Intel Atom Z3735F.

Chromebook on a stick

The other Rockchip RK3288 powered Chrome device is the Chromebit, and HDMI dongle that brings full Chromebox (a set-top Chrome computer) to a dongle. It’s powered by a Rockchip 3288 SoC, has 2GB of RAM, 16GB of storage, and 802.11ac connectivity.

One obvious use case for the Chromebit is presentations. Instead of trying to get one’s laptop connected to the venue’s projector, someone could just plug in the Chromebit into the projector’s HDMI port.

Pricing of the Chromebit will be less than $100.

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The most interesting news from last week’s Mobile World Congress was not a new smartwatch, or flagship handset, but rather a rumor that MediaTek (TPE: 2454) and AMD (NASDAQ: AMD) were on the verge of a licensing deal that would put Radeon GPUs into MediaTek’s SoCs.

While this deal is far from confirmed, on paper it’s a logical partnership that would allow both parties to score wins in respective spaces they have struggled in.

For MediaTek, the Radeon GPU technology would allow it to lessen its dependence on ARM’s (LON: ARM) Mali GPU and Imagination Technologies’ (LON: IMG) PowerVR GPU. MediaTek uses both for its GPU lineup: Mali on the low-end and PowerVR on the high-end. This would allow MediaTek to differentiate itself from other users of Mali, and would also free it from licensing GPU technology from Imagination — a company that it may be soon competing with in the SoC space if it starts bringing in some mobile hardware wins from MIPS.

And for AMD this is a chance to finally break into the mobile space. For a number of reasons, especially Intel’s (NASDAQ: INTC) aggressive subsidies of its chips in the mobile space, AMD could not compete in mobile. Eventually, last November, it said that it had “given up” on tablets having long backed out of the smartphone race.

What about Skybridge?

The going assumption — and it might prove to be correct — is that MediaTek would be the majority partner in this deal as it has the proven experience in the mobile space. However, considering AMD’s ambitious Skybridge plan — pairing ARM and AMD on the same die — it might be that this is a deal of equals.

Originally Skybridge was supposed to be about x86 and ARM on the same die, but this could be the evolution of the project. The big takeaway from the project would be successful interfacing of ARM and GCN, and the use of low-power Carrizo GPUs.

Remember that there is already significant cooperation between AMD and MediaTek on the Heterogeneous Software Alliance, so familiarity between teams exists.

AMD is scheduled to report its earnings in mid-April, while MediaTek has April 28 booked to report. If this deal has legs, an announcement would likely come around that time.

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In what may turn out to be a vital move for MediaTek (TPE:2454) in its bid to challenge Qualcomm (NASDAQ:QCOM) in the mobile segment, it is believed that the Taiwanese manufacturer is set to license AMD’s (NASDAQ:AMD) graphics technology for its SoCs.

There are no concrete details on the alleged partnership, which is said to have occurred at Mobile World Congress in Barcelona. Siding with a vendor such as AMD would be beneficial to both companies as it would give MediaTek leverage a significant advantage in the realm of mobile graphics, and AMD would stand to gain a foothold in the ultra low-power market.

Nvidia (NASDAQ:NVDA) already has the Tegra X1 in this segment, and even if AMD does not create an SoC by itself, siding with a manufacturer such as MediaTek would ensure that its offerings are seen in a wide variety of hardware, a feat that Nvidia has failed to achieve thus far with its Tegra chips.

MediaTek is set to up the ante this year with its range of 64-bit octa-core SoCs that offer LTE connectivity, and while its offerings are slowly gaining traction — particularly in markets like China and India — the Taiwanese vendor does not manufacture a custom graphics solution. Options in this segment include ARM’s Mali GPU and Imagination’s PowerVR offerings, both of which MediaTek has used in the past.

Qualcomm, meanwhile, holds a significant lead with its in-house Adreno GPUs, the foundation of which was built on by ATI, which AMD acquired in 2006. AMD finally sold the technology — branded Imageon — to Qualcomm for a meager $64 million in 2009. A deal with MediaTek would bring about a re-entry into the world of mobile graphic solutions for AMD.

A collaboration between the two would also lead to an increased focus on HSA/GPGPU products, considering that MediaTek is a founding member of the HSA Foundation. There’s no mention as to when we will see a MediaTek SoC powered by AMD graphics, and seeing as how Computex is where AMD is said to launch its next-generation desktop video cards, it is likely we’ll hear more about the vendor’s re-emergence into the world of low-power graphics at the event.

VR World has reached out to MediaTek for comment and will be updating this post if the company chooses to respond.

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Qualcomm (NASDAQ: QCOM) is facing more legal trouble in Asia.

According to reports by the Maeil Business Newspaper from Seoul, later confirmed by Reuters, Qualcomm may be facing an investigation by the country’s Fair Trade Commission. The reports are not very specific, but it appears that regulators would be investigating whether Qualcomm is abusing its “dominant market position” in the country.

While this comes just days after Qualcomm wrapped up a similar case in China, it would not be the first time that Qualcomm earned the ire of regulators in South Korea. In 2009 regulators fined the company $207 million for charging higher royalties to phone manufacturers that decided to blend Qualcomm’s processors with a competitors baseband. At the time this was the largest fine the South Korean regulator had ever administered.

Qualcomm needs a new strategy

While there’s an argument that regulators should take a hands off, laissez-faire approach to situations such as this the reality is regulators will want to get involved to ensure that a foreign company doesn’t have a commanding control of such an important part of the mobile industry.

The vast patent library, combined with Qualcomm’s sheer size, makes it a target for regulators. In some ways it’s a victim of its own success. Qualcomm does make a number of key 3G and 4G related patents available for FRAND licensing, but it appears to be the opinion of regulators around the world that this is simply not good enough.

It isn’t Qualcomm’s fault that it is in such a dominant market position. The free market has failed to provide a worthy competitor. Taiwan’s MediaTek (TPE: 2454) shows potential, and has proven to be innovative with its work on HSA, but it has not provided a steady stream of hardware wins — even in the low-end sector — to take the momentum away from Qualcomm. Plus, it will be fighting for marketspace with up-and-coming vendors from China.

Qualcomm would be wise to consider spinning off a strategic selection of its patent library into some sort of holding company, unrelated to Qualcomm, and using that as a vehicle to engage in patent licensing. That way Qualcomm could continue to receive the funding that it earned from developing the patents, while having an unrelated company managing the respective licensing — thus reducing the ability of regulators to claim that it is “abusing its market position.”

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MediaTek (TPE: 2454) will enjoy a bigger share this year of the high-end smartphone chip market because of a better product mix, a European brokerage said on Feb. 10.

The brokerage cannot be identified due to Financial Supervisory Commission’s regulations, now that the information and forecast it shared may have impacted local bourse.

The brokerage said that MediaTek is planning to finish its designs for three generations of high-end smartphone integrated circuit products in 2015 by using 28-nm, 20-nm and 16-nm process technologies. It may end up with higher operating expenses but it will also end up with higher gross margin, the brokerage said.

“Overall, we expect MediaTek to enjoy its high-end and mid-end smartphone IC share gain. In addition, MediaTek is improving its position among China’s 4G smartphone makers in the mid-end to high-end market,” the brokerage said.

MediaTek remains the leading chip supplier to Chinese smartphone vendors. On Feb. 9, the company reported lower-than-expected earnings of US$0.21 per share for the fourth quarter last year. The company forecast a 10% to 18% sequential decline in its revenue for the first quarter this year, with an estimated profit margin of 12% to 18%, which is below market expectation of 21% because of rising research and development expanses.

On Feb. 9, an anonymous Japanese brokerage kept its “reduce” rating on MediaTek shares and cut its price target from US$14.5 to US$12.9. It said that MediaTek might have been struggling with a “learning curve” for 4G chips as it has been trying to catch up with bigger rival Qualcomm (NASDAQ: QCOM).

“The operating expenses hike in 2015 showed MediaTek’s strong ambition in catching up with Qualcomm, but also implied that narrowing the technology gap is not easy, which reinforced our view that MediaTek remains in a transition period,” the Japanese brokerage said.

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Taiwan’s leading integrated circuit designer MediaTek (TPE: 2454) said on Jan. 9 that it has reached its sales target for the fourth quarter of last year, which was also an achievement it attributed to solid global demand for smartphone chips.

MediaTek reported US$1.73 billion in consolidated sales for the period between October and December last year, down 3.51% from a quarter earlier in reflection of the year-end slow season, the company said in a statement. The fourth-quarter sales figure, however, was well within MediaTek’s forecast of the amount between US$1.6 billion and US$1.77 billion.

During last December, MediaTek said that its consolidated sales totaled US$517 million, up 1.8% from a month earlier and 30.46% year-on-year. The leading IC designer company of its kind said that strong demand for 4G smartphone chips helped offset the effects of the year-end slow season.

MediaTek said that during 2014, a 56.6% annual increase was posted in consolidated sales to US$6.45 billion, breaking the US$6 million mark for the first time. The significant annual growth was attributed not just to strong smartphone chip shipments but also to the company’s acquisition of a smaller competitor MStar Semiconductor (TPE: 3697) last February, MediaTek said.

For 2014, MediaTek said that its smartphone chip shipments have totaled 350 million for its global market, while 30 million of them were 4G ships. In the meantime, the company forecasted that its global 4G ship shipments will rise to at least 100 million units before the end of this year.

On Jan. 8, MediaTek President C.J. Hsieh (謝清江) said that the company will try hard to seek 4G smartphone chip orders from customers outside China. He also said that the company is confident in the competition against its major rival – the U.S.-based Qualcomm (NASDAQ: QCOM).

Qualcomm’s share of the China market in 2014 was estimated at about 50%, while MediaTek’s was around 25%, according to Strategy Analytics.

Shares of MediaTek on the Taiex rose 0.62% to close at US$14.79 per share on Jan. 9, Taiwan time, outperforming the broader market, where the weighted index ended down 0.24% at 9,215.58 points.

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After announcing an SoC tailored for the Android TV platform, MediaTek (TPE:2454) has now launched the MT2601: an affordable chipset that is targeted at Android Wear. Device manufacturers will be able to build their own hardware and software solutions for Android Wear with the MT2601 at the core of the wearable.

The affordability of the SoC is due to the fact that it contains 41.5% fewer components than similar solutions available today. Instead of taking a mobile-based chip and retooling it — like Qualcomm (NASDAQ:QCOM) has with the Snapdragon 400 — MediaTek built the MT2601 from the ground up for wearable devices.

In terms of hardware, the MT2601 has a dual-core Cortex A7 CPU and a Mali-400 MP1 GPU. The SoC can handle qHD resolutions, which is more than sufficient for a device like a smartwatch. With the Snapdragon 400, Qualcomm disabled three of the four available cores to make it more efficient on low power devices. By offering a solution with lower hardware specs (but enough to drive current-gen wearables), MediaTek’s MT2601 has the potential to significantly increase battery life of wearable devices.

MediaTek has mentioned that the MT2601 is currently being integrated into wearables right now by device manufacturers, with consumer-ready versions set to arrive over the coming months.

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After Nvidia (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM), it is now time for MediaTek to announce its plans for the year ahead. The Taiwanese chip vendor witnessed a meteoric rise in 2014 thanks to affordable SoCs that offered LTE connectivity, and for 2015 MediaTek is looking to the IoT segment to drive growth.

One of the major announcements from MediaTek at CES was that it will be powering Sony’s Bravia line of TVs this year. Sony has already announced that all of its smart TVs will run on Android TV, and by securing a partnership with the renowned TV manufacturer, MediaTek has scored a major win in this segment with the MT5595 SoC. The SoC is targeted at 4K TVs that run Android, and is likely to be featured in other UHD TVs that are set to launch later this year.

MediaTek’ big win at #ces2015 might not be a flagship handset, but rather its silicon in Sony’s smart TVs. pic.twitter.com/wuhYVos3Fi

— Sam Reynolds (@thesamreynolds) January 7, 2015

MediaTek has also announced that it is collaborating with Google on an Ultra HD TV platform powered by Android TV, and that its solution is the first in the world to support Google VP9 and HEVC codecs, which are designed for 4K2K content streaming at 60 frames per second.

As for the hardware, the MT5595 SoC contains four cores ARM v7 cores – two high-performance Cortex A15 cores as well as two energy-efficient Cortex A7 cores – in a big.LITTLE arrangement. Voice search is an inherent feature in all models that feature the SoC, and customers will also be able to browse the Play Store for games, movies and music. MT5595 isn’t the fastest SoC in the market, but it is more than sufficient to run the Android 5.0-based interface.

Also included in the MT5595 is MediaTek’s ClearMotion technology, which the vendor claims will upscale low-quality content. The SoC adheres to ATSC/DTMB/DVB/ISDB standards, and works with middleware solutions like Ginga/MHEG/MHP and broadband services like HbbTV.

The SoC is in mass production, with MediaTek announcing that consumers will be able to buy TVs that feature the chipset starting March 2015.

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MediaTek (TPE: 2454) announced late Thursday that it had posted a 6% rise in profits quarter-over-quarter, earning $435 million in the third quarter of 2014.

The chip designer’s revenue for the period rose by 6.2% to $1.8 billion. Wall Street had expected slightly more, and the revenue growth comes in at the low end of the guidance issued by MediaTek last month. The company said that it was expecting growth between 5-13%.  The company also reported that its profit margin fell 0.5% from a quarter prior to 49.1%.

MediaTek’s CFO Ta Wei Ku said during an earnings conference call that MediaTek missed expectations because of a faster than expected transition to 4G from 3G.

“I think for the third quarter numbers, in general, the smartphones are maybe a little bit softer than – relatively speaking, while we’re giving out the guidance, 5% to 13%,” he said during the call. “I guess most likely, it’s because the 3G and 4G transition actually happened actually pretty strong in the third quarter. And for 4G products, currently for third quarter, the major product we have is still dual-chip solution.”

MediaTek executives said that they expect the company’s profit margin and earnings to dip in the next quarter as it spends more money on research and development in order to better compete in the baseband market.

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During today’s Nvidia (NASDAQ:NVDA) earnings call for Q3 with very good numbers, Nvidia’s CEO Jen-Hsun Huang indicated that the company was already actively discussing licensing its GPU technologies in the mobile space to certain partners.

While Huang did not say how many partners they were working with or at what stage they were in the discussions, he did say the following, “Our licensing discussions are very active. And we have many in important stages.”

That statement was a response to an analyst question about the success of Maxwell and if it was bringing any potential progress on the licensing front. Currently, Nvidia is the sole user of its mobile GPUs and mobile GPU IP, however, with the success of Maxwell in desktop, there is a very good chance that some companies would become interested in utilizing it for their SoCs. Afterall, if you look at some of our Maxwell reviews, you can see that Nvidia is getting much more performance out of their GPUs while using the same process (28nm) as the previous generation and simultaneously reducing power. These advancements eventually trickle down to Nvidia’s mobile products as the company’s product roadmaps have indicated in the past.

Currently, the Tegra K1 utilizes Nvidia’s Kepler architecture, which was originally launched in desktop and laptop GPUs back in 2012 and then perfected in 2013 with the GTX Titan. Following the Kepler release in 2012, Nvidia announced the Tegra K1 (formerly known as Tegra 5) with Kepler in the beginning of this year and has been shipping Tegra K1 SoCs since the summer. So, a realistic timeframe to see Maxwell GPU IP in mobile is very likely going to be towards the tail end of 2015 or the beginning of 2016, so that isn’t necessarily going to be as quick as the mobile refresh cycle usually is. However, with each generation of SoC Nvidia has vastly improved the speed of GPU architecture implementation so there’s no knowing exactly how soon we could see an Nvidia GPU in something like a MediaTek.

It will be interesting to see how Nvidia will balance their GPU IP licensing with customers if they are also simultaneously competing with them. After all, ARM and IMG license both CPUs and GPUs, but neither of them actually produce their own products that compete with their licensees. There is also a chance that Nvidia may be trying to muscle weaker companies into licensing their technology because of the strength of their patents, which may be why Nvidia recently sued Samsung and Qualcomm.

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China has long been paramount to Taiwan’s technology hardware firms. It first offered them a low-cost manufacturing base for electronics components sold to global brands like Apple (NASDAQ: APPL), and later, as some transitioned into branded consumer electronics, a huge market that shares geographic and cultural proximity with Taiwan.

The key Taiwanese firms in Apple’s supply chain have flourished. Hon Hai Precision Industry (TPE: 2317), also known as Foxconn, is the world’s top contract electronics maker and Apple’s largest supplier. From April to June, Hon Hai’s profits rose for the third consecutive quarter to $673 million ($NT20.19 billion) . Taiwan Semiconductor Manufacturing Co (TSMC) (TPE:2330) is the largest contract chip maker globally and produces the microprocessors in Apple’s smartphones and tablets. TSMC posted a record net profit in the third quarter of $2.51 billion (NT$76.3 billion).

But as China’s own companies move up the value chain, Chinese wages rise and the renminbi appreciates, many Taiwanese tech firms see their competitive advantages eroding.

Chinese firms have a strong edge in their home market, the world’s largest for technology products. Beijing provides its companies with low-interest loans, generous subsidies, government procurement and even judicial protection.

“Support from the Chinese government is the greatest asset Chinese tech firms have,” says Avril Wu, an assistant vice president at TrendForce, a Taiwan-based market-research firm.

Beijing also restricts foreign investment in the telecommunications sector, which is an oligopoly dominated by the state-owned carriers China Telecom (HKG: 0728), China Unicom (HKG:0762) and China Mobile (HKG: 0941). Beijing’s support, along with aggressive marketing and retail distribution strategies, have helped Chinese brands Lenovo (HKG: 0992), Huawei (SHE:002502) and Xiaomi grab smartphone market share from global competitors including Samsung and Taiwan’s HTC (TPE: 2498).

Losing in China

Two years ago, Ray Yam, who then headed HTC’s China operations, said the firm’s goal was to be one of the top two handset vendors in China by revenue by 2015.

At this point, that seems unlikely. HTC has flagged badly since 2011, when it sold one in ten mobile phones worldwide and was the global leader in Android smartphone shipments. In China, it has just a 5% share of the handset market, according to TrendForce.

“HTC’s new models lack innovation and outstanding features,” says Vanessa Zeng, a senior analyst at Forrester Research in Beijing. “Compared with domestic brands, its products are a poor value and its brand is not clearly defined. So HTC is losing from the standpoint of both retail channels and end users.”

Fu Cong, a 30-year-old account manager with a news distribution provider firm in Shanghai, bought an HTC smartphone in early 2013 and is unsatisfied with its performance. “It became very slow after a year of use,” he says. “I don’t see any clear advantage for HTC now either, since it is more expensive than domestic brands but uses the same Android operating system. I will consider buying a domestic brand in the future.”

HTC will struggle to gain traction in China, says Wu of TrendForce. Chinese brands better understand China’s consumers and equip their handsets with in-demand software and services, she says, adding: “HTC wants to position themselves as a premium brand and keep prices up to maintain profitability, but they have neither the resources nor wherewithal to do effective marketing. They are a hardware-oriented company.”

Chips on the table

MediaTek (TPE: 2454), Taiwan’s largest chip designer, also faces tough competition in China. MediaTek posted record profits of  $420 million (NT$12.55 billion) for the quarter ending in June, as smartphone and tablet computer chip shipments rose. But Deutsche Bank downgraded its shares in September, citing unexpectedly tenacious competition in the China market.

US chipmaker Qualcomm (NASDAQ: QCOM) is China’s top mobile phone chip supplier, with a 50% share of the baseband market, compared to number two MediaTek, which has 25%, according to a Credit Suisse report. Qualcomm also holds 80% of China’s burgeoning 4G Long Term Evolution (LTE) chip market, according to data compiled by Digitimes.

“MediaTek is having trouble developing a power-efficient 4G chip,” says Wu of TrendForce. “They are going to try to grab market share by undercutting competitors’ prices, which will hurt profitability throughout the industry.”

Meanwhile, local competition is intensifying, buoyed by funding from China’s state coffers. The Beijing-backed private-equity firm Tsinghua Unigroup acquired local chipmakers Spreadtrum Communications and RDA Microelectronics a year ago for $1.78 billion and $907 million, respectively. Spreadtrum is China’s second-largest chip designer and RDA its third-largest.

In September, Intel (NASDAQ: INTC) took a 20% stake in Unigroup for $1.5 billion. Intel aims to penetrate the mobile chip sector by allying with Chinese rivals dominant in that industry as growth slows in personal computers. This investment also gave both Spreadtrum and RDA access to the Intel Architecture for future system-on-a-chip projects.

Still, MediaTek is likely to hang on to its strong position in the Chinese market for now, says Arthur Liao, an analyst at Fubon Securities in Taipei. “Chinese firms are becoming more aggressive in the production of mobile chipsets, but it will be hard to threaten MediaTek in the next two to three years,” Liao says. “But in the long term, China intend to dominate the market.”

Ceding ground slowly

Indeed, Beijing has set its sights on the semiconductor industry. While China is the top consumer of chips in the world, accounting for 45% of global demand, imported integrated circuits comprise 90% of that consumption, according to the consultancy McKinsey & Company. To strengthen the competitiveness of domestic semiconductor firms, the Chinese government is forming a special task that aims to boost their revenue at a compound annual growth rate of 20% until 2020. Beijing could pour up to $170 billion (1 trillion renminbi) into that project over the next five to ten years, McKinsey says.

China also intends to develop a world-class chip packager and tester. Taiwan’s Advanced Semiconductor Engineering (ASE) (TPE: 2311) is currently the world’s number one chip packager.

Ultimately, China seeks to build a team of semiconductor national champions and will move aggressively to acquire other companies in pursuit of that goal, says Jeff Pu, an analyst with Yuanta Securities in Taipei. In September, China’s largest chip packager and tester Jiangsu Changjiang Electronics Technology, flush with funding from Beijing, bid to acquire the Singapore chip packager and tester Stats Chippac Ltd. (STAT) (SGX:S24) . “China wants to use acquisitions to leapfrog up the value chain of chip packaging, which has a low entry barrier,” Pu says. “Chinese firms could be competitive with ASE in one to two years.”

Liao of Fubon Securities believes TMSC, with its superior technology, will dominate chip making for the next two to three years. After that, he says, it may have to contend with formidable Chinese competitors.

But because of the strength of its global distribution network and importance in Apple’s supply chain, Foxconn will remain the world’s preeminent contract electronics manufacturer, Liao says.

Increasing automation will also help Foxconn keep costs down and reduce the possibility of worker unrest at its factories, says Pu.

Still, for most of Taiwan’s technology hardware companies, rising Chinese competition will be difficult to manage without government support, particularly given the lengths to which Beijing goes to strengthen the hands of its own firms.

Worryingly, amidst political gridlock between the ruling Kuomintang and opposition Democratic Progressive Party, the Taiwanese government appears unable to act on behalf of Taiwan’s technology industry, wrote Kirk Yang, Barclay’s Asia Pacific ex-Japan head of technology hardware research, in a report published in June. Yang said more projects like the Hsinchu Science Park, which was established in 1980 and became a center for global semiconductor manufacturing, are needed if Taiwan’s technology firms are to remain global leaders.

Unfortunately, that type of support from the beleaguered Taiwanese government is unlikely to be forthcoming, says Pu. “I don’t think that’s where their priorities are,” he says.

Image credit: Matthew Fulco

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MediaTek (TPE: 2454) is the latest chipset vendor to provide tools to developers venturing into the Internet of Things segment, after the vendor announced that it is launching a MediaTek Labs initiative. The global initiative will see MediaTek provide software as well as hardware development kits to students, developers and any enthusiast users looking to build for the IoT segment.

Along with the development kits, MediaTek will offer guidance and support to developers, students and tinkers working on building wearable devices. With MediaTek Labs, hobbyist builders can buy the vendor’s LinkIt development platform for $79, which includes the MT2502 (Aster), a SoC designed for the wearable market. One of the main advantages offered by Aster is energy efficiency, which is achieved by entering a low power state which is activated when the device is idle, allowing wearables utilizing the SoC to deliver a battery life of four days. The processor is based on the ARMv7 architecture, and while it may not be able to drive a smartwatch running Android Wear, it is sufficient to drive other devices like fitness trackers. 

In addition to the Aster SoC, the LinkIt platform contains Wi-Fi (MT5931) and GPS (MT3332) chipsets, which makes it easier for hobbyists to build prototype devices. MediaTek is also offering a host of told and services on its Labs website for developers looking to get started in the IoT segment. 

MediaTek Labs’ efforts echo what other vendors in this space have been doing over the course of the year. Intel (NASDAQ:INTC) offers the Quark development platform for IoT devices, while Qualcomm (NASDAQ:QCOM) is building its own ecosystem of connected services through the AllJoyn platform. At this year’s IDF, Intel focused heavily on the wearable segment, talking about low-power processors which will power upcoming devices in this market. While MediaTek has been content to provide low-cost SoCs for Chinese manufacturers thus far, with its latest initiative, the vendor is signifying its intentions to venture into other territories and garner more attention from the Western world. 

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Earlier this month, Google (NASDAQ: GOOG) introduced the Android One platform in India, with three local vendors launching the first generation of Android One handsets. As Google has done with the Nexus program, the search giant is collaborating with silicon vendors and component vendors to create a unified experience across form factors and manufacturers. While the Nexus and the Google Play edition devices are targeted at the mid-tier and the high-end segments, Android One is solely aimed at the entry-level market.

Overview of the Android One initiative

With Android One, Google is offering a turnkey hardware solution to manufacturers, which saves them time and resources in creating a brand new handset. Under the initiative, Google will offer handset manufacturers a list of pre-selected hardware components, which the manufacturers can then choose from. There is no defined rule in terms of hardware, although handset manufacturers are encouraged to include features that are considered essential in the entry-level segment, like dual-SIM connectivity when we’re talking about the Indian market. While manufacturers must meet a minimum hardware criteria, they have free reign when it comes to the design of the handset.

The software side of things will be managed entirely by Google, with no intervention from vendors. The search giant will offer stock Android on all Android One devices, similar to what it does on the Nexus line. Quick rollout of new Android updates has always been a major issue when it comes to local manufacturers, and with Google taking back control in this regard, Android One handsets will be among the first to receive updates to the latest versions of Android. Google has already mentioned during the launch of the handsets that it will be issuing Android L updates to all Android One handsets as soon as it is ready to roll out.

The first wave of Android One handsets include devices from the likes of Micromax, Karbonn and Spice Mobiles, and while internally all three handsets share the same hardware, they all come with a different external design. This, essentially, is the crux of Android One: No matter what handset vendor you choose, you are guaranteed to get a similar experience.

In broad strokes, these devices feature 4.5-inch 854 x 480 screens, 1.2 GHz quad-core MediaTek CPU, 1 GB RAM, 4 GB internal memory, microSD card slot, 5 MP camera, Wi-Fi 802.11 b/g/n and 3G connectivity along with a 1700 mAh battery. They may not be the fastest devices in the world, but Google is not going after benchmark crushing numbers; it is rather focusing on giving the next billion users access to an affordable entry-level handset that comes with a decent set of features. As such, the first batch of Android One handsets cost in the vicinity of $104, which is great value for money considering the hardware they offer.

We say that these are the first wave of devices because Google clearly has bigger ambitions for the Android One platform.

Future growth

During the Android One launch in India, Google announced that while the country was ground zero for the platform, Android One will not be limited to India, and that other countries in the South-East Asian region will have access to Android One handsets by the end of the year. Google touted a host of hardware collaborations with international vendors including HTC, Asus, Acer and others. Notably missing from the list were Samsung, Sony and LG; Google did not mention whether they would be added at a later stage or not, but from the look of things, it seems unlikely as all three vendors have their own offerings in the budget segment.

In addition to international hardware manufacturers, Google has also mentioned that it is bringing silicon vendor Qualcomm into the fray later this year. The addition of Qualcomm is very interesting, as this will be the first time the manufacturer will be offering its SoCs in the $100 segment. Qualcomm recently announced the Snapdragon 210, an LTE-enabled quad-core SoC targeted at the entry-level segment. While Qualcomm has focused its attention in the mid-tier and high-end segments, to an extent that is has an effective monopoly in these areas, MediaTek has managed grab a significant chunk of the market share in the budget segment thanks to offerings like the MT6592, a quad-core Cortex A7 based SoC that was widely available in $150 to $200 devices launched last year and early this year.

The introduction of the Snapdragon 210 changes all that, with Qualcomm aiming at $100 devices with the SoC. It is entirely feasible that Qualcomm makes the Snapdragon 210 available for Android One devices, which leads to an exciting prospect: An HTC designed, LTE-enabled handset powered by Qualcomm for $100. That has the potential to turn the budget market on its head. Whether it actually comes to fruition is something only time will tell, but it is exciting to see how Android One evolves as a platform once it starts becoming available in other territories.

With Android One, Google is offering a great choice to consumers in that they can get a similar experience from different handset vendors. The ability to control the software side of things eliminates a lot of pain points faced by users, and the availability of such features in the entry-level segment will attract a lot of users to make the switch from feature phones in countries like India. The Nexus line has been hugely successful in developed markets, and it looks like Android One will be no different in emerging countries.

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ARM announced today the signing of the 50th licensing agreement for its ARMv8-A technology, which includes support for 64-bit computing.

ARM did not disclose the 27 companies that have signed thus far, but has mentioned that they include all of the top ten companies who sell application processors for smartphones, nine of the top ten application processor companies for tablets, four of the top five companies that provide chips for consumer electronics, four of the top five companies that provide chips for enterprise networking and servers along with eight silicon vendors from Greater China. In short, most of the big names in the chip manufacturing industry have signed up. 

ARM stated that the licensing agreement demonstrates “continuing strength in demand for the company’s 64-bit-capable ARM Cortex-A50 processor family and ARMv8 architecture licenses.” Current processors in the Cortex A50 series include the Cortex A53 and the Cortex A57, both of which are scheduled to be available in consumer devices starting next year. The Cortex A53 core is designed to be energy efficient, while the Cortex A57 core is ARM’s highest performing processor.

The licenses cover the ARMv8-A architecture as well as Cortex-A57 and Cortex-A53, which means that licensees can either use stock Cortex A53 or Cortex A57 cores in their SoCs, or leverage the architecture license to build tailored cores, like Qualcomm does with its Krait line of processors. While 64-bit hardware is not yet mainstream, major silicon vendors like MediaTek, Qualcomm and Samsung have committed to launching 64-bit SoCs next year. 

In recent years, ARM’s growth has been nothing short of astonishing, with the company announcing that it has signed more than 1100 license agreements for its processor designs. With over 50 billion chips powered by ARM, in the majority of the world’s connected devices,  it is unlikely the vendor will see a wane in demand anytime soon. 

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An outright takeover of MediaTek by Intel to give Intel a fighting chance in the mobile market is likely to occur in the next two-to-three years, if one analyst’s prediction is to be believed.

RBC Capital Markets Analyst Doug Freedman said in a research report released Wednesday that such a deal will happen as Intel struggles to organically increase its mobile market penetration organically while increasing shareholder value. For Intel, an acquisition of MediaTek — which doubled its baseband chip revenue between 2007 and 2013 from 7.3% to 14.4% — would give Intel a 30% market share within seven years compared to the 4% slice of the market it currently has that largely comes through a multi-billion dollar contra revenue program.

“Instead of Intel continuing to spend $4-$6 billion a year to enter the market (higher end of spending range as it achieves success), hypothetically, an acquisition of MediaTek may reallocate Intel’s best-in-class under-utilized fabs and financial resources to a rising star in the system-on-chip world, solidifying MediaTek’s market position,” Freedman wrote in a note to clients.

Freedman said that an acquisition of MediaTek, the idea itself has shades of Intel’s deal with Rockchip from earlier this year, would come in around the $27 billion range, which would be a premium of around 30% on the company’s current stock. Freedman says such a deal, while it comes with its own sticker shock, would create much more shareholder value in the long run than Intel trying to build the business up on its own.

The right ingredients, the wrong recipe

On paper, Freedman’s speculation of a possible deal makes some sense but is not likely in the long run because of practicalities. For its part Intel does need all the help it can get to increase its mobile market share, hence its deal with Rockchip, but an outright acquisition of MediaTek is still far fetched.

While MediaTek does have some very innovative IP in its portfolio, particularly in the space of heterogeneous computing (part of the reason why its a founding member of the HSA Foundation), its success is also the product of it being in the right place at the right time (read this author’s interview with MediaTek executives from earlier this year for more on this topic). Aside from HSA, MediaTek is best known for creating SoCs for low-cost devices marketed towards the developing world with CPU cores licensed from ARM and GPU cores mostly licensed from Imagination. MediaTek’s chips find their home in the devices being sold in tier-three and four cities in China, as well as growing regions south east Asia. MediaTek simply had the right experience and the right (with geographic proximity) supply chain allowing it to cash in on this market. Any firm could have had this success, if it were as ambitious as MediaTek.

This is where MediaTek’s value comes from. While Intel’s x86 platform is not quite at the competitive level as ARM for mobile applications, Intel would, under the right set of circumstances, be very capable of being “a MediaTek.”

So if Intel were to buy MediaTek it would be curious to see what it would do with it. There are too many unanswered questions to make the deal seem plausible at this time: would it be MediaTek powered by Intel, with Intel’s CPU and GPU IP replacing ARM’s and Imagination’s? How would customers react? What about chip pricing?

In addition if Intel purchased MediaTek it would find itself in an awkward situation, as it would now be cooperating heavily with rival AMD in developing the HSA standard.

Freedman has been shopping this theory around for some time, with it first appearing last November after Intel’s analyst day — an event that left many with a sour taste in their mouths. The theory itself is interesting, and worth considering, but don’t count on it happening anytime soon.

The post An Intel-MediaTek Deal Makes Sense, But is Not Likely appeared first on VR World.

The PC Gaming Alliance, also known as the PCGA, known for championing the cause of the PC platform and specifically gaming on the PC, has changed their name to the Open Gaming Alliance and have refocused their efforts. In a short but concise statement, the Alliance has announced that they will be changing their name to the Open Gaming Alliance and refocusing their efforts on open gaming in general instead of just focusing on the PC. After all, most of the PCGA’s members now are involved in gaming in one way or another outside of the traditional PC formfactor.

“As the market for digital games grows on a variety of mobile platforms and as the PC is no longer the most dominant gaming form factor, the PC Gaming Alliance, (PCGA), a nonprofit corporation dedicated to driving the worldwide growth gaming, is pleased to announce the name of the organization has been changed to Open Gaming Alliance, or OGA.”

Now that the PCGA is called the OGA, maybe they can attract someone like Qualcomm to contribute to their efforts and increase the visibility of gaming on all platforms. And of course, they now have a new mission, even though most of their members remain the same.

“Our mission is to keep the gaming ecosystem “open” and the most profitable platform for publishing games. Our focus is across multiple OSs such as: Windows, Mac OSX, SteamOS, Linux, etc.; and for all form factors including desktops, laptops, tablets, and 2-in-1s. We provide a unified leadership voice for the industry.”

Clearly, Intel is still driving a lot of the conversation here as they have in the past with the PCGA, and of course it makes sense, but it doesn’t change the fact that their dominance of the PCGA and OGA will very likely keep away someone like Qualcomm or Mediatek, or even Rockchip. Having global partners will be incredibly important for the OGA and I’m frankly surprised that they haven’t gotten Facebook onboard yet with Oculus and other platforms. It will be interesting to see how the OGA will change their analysis of the industry and what their new focuses will be since the PC is no longer a focal point. They should also get more manufacturer onboard other than Razer, which should also elevate the level of the alliance’s importance. The fact that they also don’t have someone like Valve onboard is also a bit shocking, so it seems like maybe they have some outreach work to do. Hopefully they will grow now that they’re more ‘open’ and we’ll see more members joining shortly.

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In an unfortunate turn of events, Broadcom has decided to completely shutter their entire baseband modem business less than a year after acquiring Rensas’ own mobile modem business which had been under threat of also shutting down after originally being acquired from Nokia. This announcement came as part of the company’s earnings release yesterday, where they reported a $1 million loss on $2 billion in revenue (essentially break-even) compared to the previous quarter where they had made $165 million. But even so, Broadcom has announced that with the shuttering of this division they will be laying off approximately 2,500 people which are currently part of this business division.

The sad truth is that Broadcom’s board (and investors) never really gave this division a chance to actually compete with the likes of Qualcomm and Intel after the acquisition of Rensas Mobile’s division. We’re less than a year from when the acquisition was announced and the transaction wasn’t completed until October. Meaning, that They’ve been working with Rensas’ Mobile’s team for about 10 months and let’s also not forget that today isn’t the first time we’re hearing about this division having issues. Broadcom had already indicated that they were already looking to sell or shut down the division back in early June (Computex). But none of this really makes much sense in terms of a business decision primarily because the division’s latest and most prominent addition never really had much of a chance to prove itself. They certainly had some promising things at Mobile World Congress, but the lack of major design wins very likely hurt them.

In the end, it simply isn’t easy to build good modems and to be able to sell them, especially when you don’t have a competitive applications processor nor do you have a product that combines the two to save manufacturers money, design costs, and battery life. I’m sure a lot of people wish things had turned out differently, but the biggest problem for this announcement is that it means there’s less competition in the modem market once again. This announcement and Broadcom’s earnings lifted the company’s stock yesterday in after hours trading, however it should also be known that this will also positively reflect upon Intel and Qualcomm’s modem businesses. However, after seeing how poorly Intel’s own mobile business performed last quarter, they’re not in a much better situation than Broadcom, to be quite honest. If anything, this solidifies Qualcomm’s dominance as the leading global baseband modem provider and should set off some alarms within some of their customers of potential price hikes due to a lack of competition from basically everyone.

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Intel reported stronger than expected quarterly earning for the second calendar quarter of 2014. In Q2 2014, Intel [NASDAQ:INTC] managed to report $2.8 billion in profit on $13.8 billion in revenue. As a result, they reported an earnings per share of $0.55 and generated $5.5 billion in cash from operations. They also paid out dividends of $1.1 billion and used $2.1 billion to repurchase 74 million shares.

Now, compared to the previous quarter Intel’s revenue of $13.8 billion was $1 billion or 8% higher than the $12.8 billion reported last quarter. Additionally, they reported an increase of nearly 5% to their gross margin to 64.5% up from 59.6%. This is surely going to make a lot of Intel’s investors very happy and should translate to much higher profits, which it has. Intel’s $2.8 billion is an increase of 45% from the $1.9 billion profit figure that they reported last quarter, which makes Intel’s stock look really good. Compared to the same period a year ago, Intel’s revenue was also up about 8% and their profit was up 40% from $12.8 and $2.0 billion respectively.

Intel Financials

Intel’s earnings for each business division showed strength in almost every single division except for Mobile and Communications. The PC Client Group revenue was $8.7 billion, up 9 percent sequentially and up 6 percent year over year. Since Intel is generally considered a bellwether for the rest of the PC industry, nearly 10% of growth quarter over quarter in the PC business is huge. The 6 percent growth over the same quarter a year ago also means that this is more than a cyclical increase and that the PC industry may be starting to rebound. Their Data Center Group reported $3.5 billion in revenue which was a healthy 14 percent sequentially and a whopping 19 percent. This has traditionally been Intel’s rock and most reliable source of reliable revenue and profit growth as the PC Client Group struggled over the past 2 years. In their Internet of Things Group (IoT) they reported revenue of $539 million, up 12 percent over the previous quarter and 24 percent other the same period a year ago. This looks great for Intel’s IoT business, but the truth is that a year ago there was almost no IoT business for anyone, so it seems a bit too early to start comparing to a year ago. But still, 12 percent over the previous quarter isn’t bad except for the fact that IoT is supposed to be one of the biggest growth sectors in semiconductors right now. And now for Intel’s black eye, the Mobile and Communications Group which reported a measly $51 million in revenue and reported a decrease of revenue from the previous quarter of 67 percent and a decrease compared to the same quarter a year ago of 83 percent. Their software and services operating segments reported revenues of $548 million, basically flat (down one percent) over the previous quarter and up 3 percent compared to the same quarter a year ago. Obviously this would be considered mostly flat, so many will mostly ignore this division when looking at Intel’s earnings.

Intel also reported their outlook for the third quarter of 2014 as well as the full year 2014. In the third quarter of 2014 they expect to report $14.4 billion in revenue, give or take $500 million. They also expect gross margin to increase to 66 percent, from 64.5 percent, plus or minus a few points. For the full year of 2014 Intel increased their outlook for revenue growth, expecting overall revenue growth of 5 percent, slightly higher than previous expectations (making investors very happy).

For Intel as a company, they have done very well this quarter and that is quite obvious. However, Intel’s mobility division that focuses on tablets and smartphones has taken an absolute beating and may indicate a serious weakness in their business plans. Intel has been promising better and better chips for tablets and smartphones, which may actually be true, however Intel has failed to gain serious design wins and as a result they only reported $51 million in revenue last quarter which is shameful compared to their biggest competitors, MediaTek and Qualcomm. I don’t know what Intel has planned to resolve these issues for the second half of 2014, but the second quarter of 2014 was an ugly one for Intel’s mobile division and that may scare some investors knowing how important it is to have a strong mobile presence.

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Early last week, Broadcom announced  that they would be looking to offload their cellular modem division or simply shutter operations. This announcement came as a surprise to many because the company had only recently acquired Rensas Mobile’s modem division (acquired from Nokia). This was done after Renesas Mobile was talking about shutting down the division entirely due to being unable to compete with the likes of Qualcomm and Infineon. Broadcom ‘saved’ Renesas Mobile’s modem division (mostly based in Finland) back in September of 2013, which completed in October of that same year with a final purchase price of $164 million.

Now, Broadcom already had fairly significant wireless modem patents for 2G and 3G technologies, but was severely weak in the 4G and beyond areas. As a result, they lost a lot of design wins and have struggled to integrate Renesas Mobile’s technologies into their own product stack. When we met with them at Mobile World Congress, a lot of the Cat 6 LTE demos equipment that they were showing still had Renesas Mobile stickers on it. But clearly, Broadcom and Renesas Mobile’s modem division were starting to meld together. That is why it seems far too soon to already be looking to offload the entire division, without even really trying.

In our conversations with Broadcom’s cellular modem division, they clearly seemed focused on delivering an affordable mainstream option with 3G and 4G technologies. However, delivering these technologies to the mainstream is incredibly competitive and very low margin, which is why investors applauded the management’s decision last week. Since the announcement, Broadcom’s stock is up nearly 20% or over $6.

What does this all mean? Well, it means that some companies that are looking to strengthen their modem offerings likely have a nice little package to pickup themselves. After all, right now there aren’t many modem companies left, let alone ones that can be acquired neatly without buying the rest of the company. Back in Q3 of 2013, there were only a few major cellular modem chip suppliers with Strategy Analytics estimating that Qualcomm, MediaTek, Intel, Spreadtrum, and Broadcom represented the top 5 market share spots. Qualcomm maintained its dominance with 66 percent revenue share, followed by MediaTek with 12 percent revenue share and Intel with 7 percent revenue share. Interestingly enough, the report continued to state that Broadcom was one of the few companies that had the potential to compete with Qualcomm on the mainstream LTE market (because of their acquisition) if they executed correctly and that 2014 would be an important year. However, that all appears to now be irrelevant since the company has effectively given up.

What this does mean, however, is that Intel, Mediatek or Nvidia could potentially step in and buy out Broadcom’s cellular baseband division to give themselves a more competitive spot in the market. Nvidia has struggled quite a bit with their acquisition of Icera, which hasn’t quite panned out well for them with their only significant modem design win being in the Microsoft Surface. They have struggled to get any design wins with the Tegra 4i, their first integrated modem product, and also struggled to get major smartphone design wins with their Tegra 4 SoC (without a cellular modem). Others say that Nvidia may just throw in the towel like Broadcom, but the truth is that there’s a good place for Nvidia if they can compete with Mediatek and Qualcomm, even just a little bit. I believe Nvidia is more steadfast than that, plus it is important for their automotive division to have cellular modem IP in order to be able to sell a whole solution to their customers.

Other potential suitors for Broadcom’s cellular modem division include Samsung, who was reportedly one of the parties interested in the Renesas Mobile acquisition back in 2013, but got beat out by Broadcom. Samsung already has their own applications processors and I’m sure would love to come out from under the grip of Qualcomm, if they could. Samsung already has their own applications processors and have experimented with their own cellular  modems in the past, but have done little since then but mix Qualcomm and Intel cellular modems. The same goes for Apple, who currently are an almost exclusive Qualcomm cellular modem buyer, but are rumored to be looking at their own cellular modem technologies as well.

Any of the above companies could be a potential suitor for Broadcom’s wireless division, and if a company like AMD wasn’t already so cash strapped, it could be a potential boon to their wireless business if they wanted to gain some momentum. However, they are simply too thinly spread and couldn’t afford to buy Broadcom’s entire cellular division like a Samsung, Nvidia or Apple could.

The post Broadcom's Modem Exit Gives 2nd Chance to Others appeared first on VR World.

It isn’t very often that we see knock offs of mainstream products that are really good ones, and it isn’t very often that they come forward to us and proudly exclaim how well they’ve managed to copy a popular product, but today we got both. The company that contacted us, Transtar, proudly exclaimed how they’ve managed to make a 1:1 copy of the Samsung Galaxy Mega 6.3″ phone. And to be honest, by looking at it, it is actually really hard to tell the difference between the phone they’ve made and the phone Samsung makes. The Galaxy Mega itself isn’t an incredibly complex phone, or one that’s especially high end, which may be the reason for copying it.

Ironically, the Samsung Galaxy Mega on Samsung’s site is actually only powered by a dual core 1.7 GHz Qualcomm Snapdragon 400 SoC, which makes it almost bottom of the barrel for large screen phones. However, Transtar’s phone, the M666Q “6.3” Quad core IPS phone tablet pc”, is actually sporting a Mediatek quad core A7 chip at 1.2 GHz, the MTK6589. This Mediatek chip is incredibly popular with Chinese manufacturers that make generic Android smartphones or knock-offs of Samsung hardware, like this Transtar M666Q. What is really nice, though, is that Transtar’s phone has 1GB of RAM and 4GB of local storage in addition to having a 720P display and a 5 MP camera, along with a 0.3 MP front-facing camera. This is obviously less than the 1.5 GB of RAM on the Galaxy Mega and less than the 8GB of local storage on the Galaxy Mega as well. The cameras on the Galaxy Mega are also 8 MP and 1.9 MP respectively, which means that this knock-off is really a cost-down version of this phone. The battery on the Transtar version is also a 2600 mAh battery versus the 3200 mAh (3.7v) on the Galaxy Mega as well, so in every way this phone is a lesser phone than the Galaxy Mega, but there’s a reason why.

The M666Q phone that is a 1:1 copy of the Galaxy Mega is actually only selling for $120, yes, $120. That is compared to the $475 that the Samsung Galaxy Mega is selling for on Amazon. That is quite literally 1/4 the price of what Samsung is selling theirs for, and this phone isn’t that outrageously underpowered compared to the Samsung. In fact, maybe Samsung should consider making these guys a partner in building their low-cost phones because it appears as though they may be able to make Samsung’s phones cheaper than Samsung themselves and there’s no training necessary. Obviously, they cut some corners, but it doesn’t change the fact that the Galaxy Mega copy is $120 a pop and is a working phone, not a fake demo device or some piece of plastic with a qHD screen.

What makes this fake all the more impressive other than the mere replication of external hardware and incredibly low price, is the fact that they were also able to replicate Samsung’s own interface. Which, if anyone that uses their interfaces knows, they aren’t really that hard to replicate in terms of performance because they all seem to slow down Samsung’s phones. So, naturally, someone that can emulate Samsung’s software as well as their hardware is going to be able to build a pretty damn good copy, like this one.

The truth is that Transtar, like many, comes from Shenzhen and there’s no denying the manufacturing capability of that beautiful metropolis of manufacturing. It is slowly becoming a center for knock off manufacturers and legitimate brands to either launch from or at least a place to have the majority of their manufacturing capacity.

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