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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People visiting Barcelona this month for the Mobile World Congress 2015 will be greeted by Huawei’s (SHE: 002502) new smart watch, which introduces a mix of old and new in a very good way.

The new wearable was simply introduced as the “Huawei Watch”. The basic overall design of the watch exude a classic look and finish, something that we are accustomed to with old-century type watches. The screens are even glazed in sapphire crystal, as well as being encased in stainless steel, which clearly introduces it as more than just another wearable. What’s obviously different though is that this is a smart watch, and has all the nifty perks modern wearables have today. It has a 1.2 Ghz Qualcomm Snapdragon 400 processor, 512MB of RAM, and 4GB of internal storage. The screen itself shows off its bright and crisp 1.4-inch 400×400 AMOLED display.

Like with many other wearables, it will feature various kinds of sensors and monitors, including a barometer, a heart rate monitor, and a standard accelerometer/gyroscope. It will also use the Android Wear OS.

As the advertisement states “classic design and impeccable craftsmanship” meshed with “state-of-the-art wearable technology”. So far, at least according to the demo announcement, the “Huawei Watch” does not disappoint. The old, stylistic look certainly warrants it the premium treatment, as quaint as it may seem to be. Performance-wise, it should be able to handle the Android Wear OS, though we may have to see the actual commercial version to firmly assess this.

Ad placements at the Barcelona Airport have been welcoming arriving guests with a discreet announcement for its “Huawei Watch”, even since before Huawei’s official announcement of the new product a few days ago. The billboards, which has the slogan “Timeless design. Smart within.” written on it, are basically teasers that introduced one of its three possible color versions: silver, gold, and black.

No prices announced yet, but Huawei announced that it will be available very soon.

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Microsoft (NASDAQ: MSFT) opened a press conference Tuesday at the Mobile World Congress with the announcement of its new Lumia 640 and Lumia 640 XL smartphones. These two new phones are targeted towards a bigger tech market with its lowered price point, making it available to more consumers.

The Lumia 640 and the Lumia 640 XL are both technically the successor to the Lumia 630 and Lumia 1320 respectively. Featuring the Clear Black Display, the Lumia 640 sports a 5-inch, 1280×720 screen, while the Lumia 640 XL ups the size a bit to 5.7-inch. Spec-wise both are almost the same, 1.2 Ghz quad-core processor, 1GB of RAM, and 8GB of internal storage. The Lumia 640 gets an 8-megapixel front camera while the Lumia 640 XL gets its 13-megapixel Carl Zeiss optics camera.

The Lumia 640

Lumia 640 XL

Perhaps the most notable feature of both phones is its one-year free subscription to Office 365 Personal, which saves its users at least $70 worth for the new units. Coupled with its relatively low-cost, Microsoft aims to widen the base for Windows Phone users, which would in turn help the development of more apps for its mobile OS.

Information for the announcement of the two new Windows Phone models was actually already leaked at least a day prior to the press conference at the Mobile World Congress. The leak was through an empty link header, which clearly detailed the announcement in the title.

Both the Lumia 640 and the Lumia 640 XL will be installed with Windows Phone 8.1. However, the two phones are also designed to be upgradeable to Windows 10 later on after it becomes officially released. It will be commercially available sometime around this month, at an equivalent price of about $156 (3G) and $178 (LTE) for the Lumia 640, and about $212 (3G) and $245 (LTE) for the Lumia 640 XL. It will also be available in matte and glossy versions, as well as in cyan, orange and black colors.

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Smartphone commoditization has hit Taiwan’s HTC (TPE: 2498) hard. The top handset maker by volume in the US in 2011, HTC cratered over the next two years, posting its first annual loss in 2013 as Samsung (KRX: 005930) and low-cost Chinese brands chipped away at its market share. By 2014, HTC was no longer one of the top ten handset brands by shipments and held a pithy 1.5% share of the global market.

Analysts warned of HTC’s impending demise and suggested a buyout to increase its competitiveness. Going private would allow HTC to pursue strategies without an immediate payoff, but which would bear fruit in the long run, such as a push into lower-end handsets, they said.

HTC rejected the idea of a buyout. But it has cut costs, introduced cheaper handsets and is expanding into new product categories.

Following these moves, the Taoyuan, Taiwan-based company has returned to profitability for three consecutive quarters. Its fourth-quarter profit rose 49% to $14.8 million over a year earlier, beating analysts’ expectations of $10.4 million. Revenue increased 12% to $1.5 billion from $1.35 billion a year earlier. In the final three months of last year, HTC also posted its first quarterly sales growth since 2011.

HTC is forecasting an annual revenue increase of 30% this year.

Reading between the numbers

Aggressive cost cutting has driven HTC’s improved performance, industry experts say. A key part of that strategy has been outsourcing production of its non high-end handsets. In May 2014, chief financial officer Chang Chialin confirmed that contract manufacturers were making some HTC smartphones. He said the company’s outsourcing volume was below 50% of total shipments, but declined to specify the actual figure.

Compal Electronics (TPE: 2324) is handling a large portion of HTC’s orders. In 2014, the Taiwanese OEM made 2 million smartphones for HTC and may ship as many as 6 million this year, says Arthur Liao, a downstream analyst at Fubon Securities in Taipei. Compal also makes handsets for many other leading vendors including Sony (TYO: 6758) and makes Microsoft’s (NASDAQ: MSFT) Surface tablet.

“Outsourcing has improved the cost structure of HTC’s mid and low-end devices,” CK Lu, a principal research analyst at Gartner in Taipei, told VR World in an interview. “It’s an important part of their strategy to boost profitability.”

But there are limits to the benefits of outsourcing for HTC, because it still produces its premium smartphones in-house. Those high-margin devices are the company’s bread and butter, not lower-end handsets.

At the same time, HTC’s financials may be shakier than they appear. The New Taiwan dollar’s fall against the greenback was an important contributor to recent profitability, says Jeff Pu, an analyst at Yuanta Securities in Taipei.   “HTC was lucky that the NTD depreciated sharply,” he says. “Otherwise, they might have posted a loss in the fourth quarter.”

New product lines

As HTC tries to gain ground against its competitors, it is rapidly rolling out new product categories: tablet computers, action cameras, wearable devices, even a virtual-reality headset. The purpose of that diversification is to provide new sources of revenue and position the handset maker as a stronger consumer brand, analysts say.

“You can’t grow producing smartphones alone,” says Lu of Gartner. “The market is too saturated. HTC is the only major vendor without something else.”

Tablet computers are an odd place for HTC to start. Not only are the devices plummeting in popularity among consumers, but HTC’s previous foray into the tablet market in 2011-2012 was a flop. Its overpriced Flyer and Jetstream tablets each lasted less than a year.

Yet HTC is the producer of the new Nexus 9 tablet, which was released in October 2014. Reviewers have compared the device unfavorably to the iPad Air 2 and Samsung Galaxy Tab S 8.4, criticizing the Nexus 9’s poor battery performance, screen resolution and camera. Sales peaked for the Nexus 9 “in the first few days,” says Pu of Yuanta Securities, adding: “It’s going to be a disappointment.”

The “Re” waterproof action camera shows better potential. Also unveiled in October, the tube-shaped device features a 16-megapixel sensor, a wide-angle lens and HD video recording capability. Since the device connects to smartphones wirelessly, it will be able to live stream directly to YouTube under a planned partnership.

The Re camera is selling well, HTC says. In December, it forecast sales of 20,000 units of the device by the end of 2014, with strong momentum carrying into 2015. Jack Tong, president of HTC North Asia, said at a product launch in February that the Re camera was performing well enough to boost the company’s overall first-quarter revenue.

HTC is competing with GoPro (NASDAQ: GOPRO) and Sony in the nascent action camera sector. Sander Research forecasts that market will grow 16% annually through 2018.

At this week’s Mobile World Congress in Barcelona, HTC is taking its new product categories a step further with the launch of the Grip fitness band and Vive virtual-reality headset.

Grip is HTC’s first wearable device. The GPS-enabled fitness band was co-developed with the American sportswear company Under Armour, which supplies wearables to the US military. HTC is positioning the device as a fitness wearable rather than a smartwatch, but it does have email, message and phone functions. Grip is also compatible with both Android and iOS devices.

The Vive virtual-reality headset, which uses technology from the US game developer Valve, is the more intriguing of HTC’s two new gadgets. Vive provides a panoramic high-definition view and tracks body and head movements as the user walks. HTC says Vive’s mobility distinguishes it from Samsung’s Gear VR and Google’s cardboard virtual-reality goggles, which users engage from the confines of a chair.

But unlike the Samsung or Google devices, HTC’s virtual-reality headset works only with PCs and consoles. HTC says it plans to make Vive compatible with mobile devices in the future.

A developer version of Vive will hit the market in spring and the device will be launched for consumers during this year’s holiday season.

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Normally, I would applaud someone like Starbucks for being so forward thinking and adding wireless charging to their coffee shops. But, the problem with Starbucks’ move is that they’ve chosen to stick with one wireless charging standard, PMA (Power Matters Alliance) which also happens to have been founded by Powermat. Powermat was originally purchased by Duracell in order to strengthen the brand and give themselves a wireless charging capability.

PMA is one of three alliances that promotes wireless charging, which also includes A4WP (Alliance for Wireless Power) and the WPC (Wireless Power Consortium). PMA and WPC are both inductive technologies, meaning that they are both very sensitive to alignment (alignment of the two coils) and height (you can’t really move more than a centimeter). Now, PMA’s technology is mostly known as Powermat or Duracell Powermat and WPC’s technology is known as Qi. The problem with PMA’s technology is that it is not built into any devices as far as we can find (there are no resource that indicate otherwise) and Qi’s technology is in dozens of phones. In fact, almost all current wireless charging phones shipping today are based on Qi wireless. However, Duracell Powermat is retrofittable onto smartphones and is popular with Samsung Galaxy and Apple iPhone owners.

Now, there’s nothing wrong with the PMA’s technology other than the fact that its inductive and that there aren’t currently any phones to my knowledge that have it built-in. However, recently many smartphone manufacturers have joined the PMA and the PMA has signed an agreement with the A4WP to work together to bring a dual mode solution to the market. This is because PMA’s inductive charging solution has a lot of limitations while A4WP’s magnetic resonance, brand named Rezence, is far less constrained by the alignment of coils or the distance from the charging plate. So, this way, users that get a smartphone with dual mode charging can use both PMA and A4WP charging depending on what may be available to them. One company that is actually part of all three alliances is Broadcom, who recently announced a chip that they have available which enables all three different technologies even though I’m not sure its possible to enable all three at the same time on a single device.

Now, if you want to see why we’re not so enthused about Starbucks’ decision to go with PMA’s solution, I offer you to watch two videos we took while we met with the A4WP at Mobile World Congress this year in Barcelona. This video will illustrate to you why magnetic resonance is the answer to most of our wireless charging questions and show you why induction charging (PMA and WPC) are not really the answer.

Currently, Starbucks has rolled out these wireless charging stations to their Boston area shops and are looking to expand it quickly.

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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.

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