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Netbooks eroding Intel’s lucrative notebook market
NEW TRIPOLI, USA: Netbook manufacturers are adding bells and whistles to their product that are blurring the lines between a netbook and a notebook.
The problem is the netbook market is migrating upward to be a low-end notebook with a small screen for a few hundred dollars less, yet it is still a few hundred dollars more than the original intention of what a netbook was supposed to be. Will there soon be no meaningful difference anymore between netbooks and lower-end, consumer laptops besides weight and Atom chip?
As a result, we are cautious about our forecast for 21.5 million netbooks sold this year as a percentage will probably be better categorized in the 177.7 million unit notebook market.
We are seeing a blurring of lines between a netbook and a notebook. We further envision netbooks on the market with multimedia capabilities for watching streaming video and DVDs. Asustek is already marketing a netbook with a DVD. Asustek initiated the netbook craze in 2007.
“Intel probably hates the situation because they are earning practically nothing for their Atom chip, which is eroding their lucrative notebook market. Microsoft gets smaller licensing fees as well,” noted Dr. Robert N. Castellano, President of The Information Network. “The only real winner will be Asustek, who is a 2nd or 3rd tier notebook supplier, trying to get market share in the mobile space.”
We noted in a release of March 9 that subsidized netbooks will start appearing.
“Along with the growing competition among software service providers, we will see a new infrastructure taking hold, modeled after Hewlett-Packard (cheap printer, expensive ink) and the mobile service providers (cheap cellphone, expensive monthly wireless charge). This subsidized bundle model will grow the ARM netbook to greater market shares. “
AT&T seems to think it was a good idea. The wireless provider is offering subsidized netbooks for as little as $49.99 in two markets, Atlanta and Philadelphia. The catch is that buyers must sign a two-year contract for an AT&T data service plan, which starts at about $60/month. (We’re waiting for AT&T’s royalty check for the idea!).
The $49.99 gets you an Acer Aspire One with an 8.9-inch display, 1GB of memory, and a 160GB hard drive. One needs to sign a two-year deal for AT&T’s Internet at Home & On the Go service, which starts at $59.95 a month.
AMD and Intel at each other, again! Post launch of Intel's Xeon 5500 processor series
Intel has recently introduced 17 enterprise-class processors, led by the Intel Xeon processor 5500 series. The Xeon processor 5500 series, previously codenamed “Nehalem-EP,” offers several breakthrough technologies that radically improve system speed and versatility. Technologies such as Intel Turbo Boost Technology, Intel Hyper-Threading Technology, integrated power gates, and Next-Generation Intel Virtualization Technology (VT) improved through extended page tables, allow the system to adapt to a broad range of workloads.
Now, even before I could analyze all of this, it was interesting to find first, AMD, and then Intel, exchanging pleasant notes on the chip’s features itself! And, I am being quite mild in my statement here! 🙂 The picture here is from the Intel Xeon 5500 launch in India.
First, AMD! According to Vamsi Krishna, Sr. Technical Manager, AMD India, “Intel launched its new processor architecture (Nehalem) yesterday, which is quite different from any of its predecessors. However, what’s amazing is that many of the ‘groundbreaking, innovative technologies’ are quite similar to technologies AMD pioneered years ago, 2003 to be precise.
“Memory controller integration into the silicon die is one of the many features included in the new Intel architecture and this is believed to boost the whole system performance significantly. However, this is a standard feature on all of AMD’s server products since 2003. Nehalem is also supported by a high speed internal bus known as Quick Path Interconnect. It will replace current FSB (Front Side Bus) in most of the current design. Again, the concept is quite similar to existing HyperTransport technology available in AMD products and is known as Direct Connect Architecture (DCA).
“Products like Nehalem and technologies like Quick Path Interconnect are simply Intel’s admission that AMD was right all along about an integrated memory controller being the key to superior processor architecture.”
Naturally, I had Intel’s response too on these remarks. As per an Intel spokesperson: “The platform architecture of the Xeon Processor 5500 series has some similarities with AMD’s platform architecture in the use of an integrated memory controller and high speed serial interconnect, although the QuickPath Interconnect offers greater performance and additional capabilities compared to HyperTransport. The individual design tradeoffs are not as important to customers as overall performance and efficiency. Previous generations of Intel Xeon processors were superior to competitive alternatives due to superior microarchitecture, process technology and cache implementation. The new platform advances help the Xeon Processor 5500 series widen this competitive lead.”
Great! Here’s a classic case of two folks sledging over nothing!
First, the Intel chip is one of its kind, as of now, and I don’t think any other chip maker has a similar product, as of April 1. If they have, please come forth!
Two, AMD, if it had indeed pioneered such technologies, as those used in the Xeon 5500, in 2003, my simple question to them is: why aren’t you the no. 1 player in the semiconductor space today?
Three, will this new chip make Intel a runaway winner? Too early to say! We are still in a downturn, although, some positive news have been forthcoming. Will the chip be able to make its mark? That remains to be seen. IT spends need to go up significantly for that to happen, isn’t it?
Gartner recently put out a report on global IT spends. It says: “The unprecedented decline of the global economy is impacting the IT industry with worldwide IT spending forecast to total $3.2 trillion in 2009, a 3.8 percent decline from 2008 revenue of nearly $3.4 trillion. IT organisations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending,” said Richard Gordon, research vice president, and head of global forecasting at Gartner. “The speed and severity of the response by businesses and consumers alike to these economic circumstances will result in an IT market slowdown in 2009 that will be worse than the 2.1 percent decline in IT spending in 2001 when the Internet investment bubble burst.”
It is not about the technologies you are using, or the process nodes. It is about market share and being there first. Who’s able to do so, timely, wins! Any other discussion won’t have any bearing!
Finally, to my friends at Intel and AMD: folks, do not take that cross-license deal issue to such levels. The industry does not need these things. It is a time to ally and move forward, focus on your core businesses and contribute to the overall health and growth of the global semiconductor industry.
Frankly, it takes off the joys of analysis, when people try to influence you to form a judgement they prefer! Well, I have always formed my own judgement, and right now, I feel that both friends of mine are in the wrong. Request, please shake hands!!
AMD's response on cross-license deal with Intel!
Folks, as promised, here’s the response from AMD on the ongoing cross-license affair with Intel.
I posed the same set of questions I had for Intel, and AMD’s spokesperson, Michael Silverman, very kindly sent me the replies.
Is this affair helping anyone?
So, if AMD and Intel were stick to their lines, will it help anyone?
Silverman said that AMD would be happy to make the entire agreement public if Intel drops its insistence on secrecy concerning its exclusionary business practices under the guise of confidentiality it has imposed on evidence in the US civil antitrust case. There is no commercial reason to have those documents under seal; it is simply a means for Intel to try to conceal its illegal behavior.
Now, AMD wants Intel to lift a demand that evidence submitted in its US antitrust suit against the chip maker be kept confidential. If it is a demand, why is it being raised?
According to the AMD spokesperson: “It is clear that global antitrust regulators are zeroing in on their illegal monopoly, with rulings against the company in Japan and Korea, and a Statement of Objections issued in Europe. Intel has so far failed to convince any regulatory body that has studied evidence obtained from Intel and its own customers that its business practices are lawful.”
In exactly what specific manner, according to AMD, has Intel’s actions violated the cross-license agreement?
AMD’s response on this count is that the AMD-Intel cross-license agreement is a two-way agreement, the benefits of which go to both companies. “Intel leverages innovative AMD IP critical for its product designs under the cross license. This includes AMD patents related to 64-bit architecture extensions, integrated memory controller, multi-core architecture, etc.). The cross-license is very much a two-way street. In fact, we informed Intel that their attempt to terminate AMD’s license itself constitutes a breach of the cross-license agreement, which, if uncured, gives AMD the right to terminate Intel’s license.”
Again, an Intel spokesman had said it was willing to make the agreement made public, but said AMD prevented this from happening. What’s the mystery?
Silverman said: “It was actually AMD that made the redacted version of the cross-license agreement public to begin with -– not Intel, so we reject this notion out-of-hand. AMD would be happy to make the entire agreement public if Intel drops its insistence on secrecy concerning its exclusionary business practices under the guise of confidentiality it has imposed on evidence in the US civil antitrust case. There is no commercial reason to have those documents under seal; it is simply a means for Intel to try to conceal its illegal behavior.”
How is all this helping the industry?
Finally, how is this dueling over the license helping the global semiconductor industry? I don’t see it helping anything at all!
Silverman added that Intel has manufactured this diversion as an attempt to distract attention from the increasing number of antitrust rulings against it around the world. “With a ruling from the European Commission and a US trial date looming, and investigations by the US FTC and NY Attorney General, the clock is ticking on Intel’s illegal practices — and yet with its dominant monopoly position it still tries to stifle competitors.
“We believe that, ultimately, Intel will either decide on its own or be forced to cease abusing its monopoly power and allow natural market forces to occur. This would speed the pace of innovation, lower prices, and improve the lives of consumers everywhere.”
Shake hands, guys
Right, this blog post is an attempt from my side to help Intel and AMD settle their differences, instead of consistently pointing fingers at each other. I personally have nothing to gain out of this, except a few readers who may wish to read this. It would really be great if these two very admirable companies could bury the hatchet and work out some sort of an agreement.
Intel has already expressed a desire to sit down and negotiate with GlobalFoundries about a license. I hope this happens, soon!
Following this, I hope I am, at some stage, able to conduct an event, where I can discuss global trends, with both AMD and Intel on the dias, along with many others from the global semiconductor industry.
My request to both AMD and Intel: please take off those gloves and shake hands! 🙂
Intel keen on discussing license with GlobalFoundries!
Friends, I am very pleased to report that Intel has expressed a desire to sit down and negotiate with GlobalFoundries about a license! Now, it is up to AMD to take up Intel’s offer and sort this out, once and for all!
This is possibly the best news coming out as far as the Intel-AMD cross-license affair is concerned. Isn’t it?
I did promise that I’ll bring you the responses from Intel and AMD. Intel’s spokesperson very kindly replied to all of my queries!
Right, I had asked both that if AMD and Intel stick to their lines, Let’s Make the Cross-license Deal Public… Will this help anyone?
According to Intel, it will help the public, the press and investors have a clearer understanding of the terms of the cross-license and in particular, why Intel believes AMD is in breach of that agreement.
I also asked them, rather bluntly, how their fracas was really helping the global semiconductor industry! To this point, Intel replied: “Our view is that AMD has a license agreement with Intel. Cross-licensing has long been a cornerstone of this industry. However, given the value of the IP assets at stake, we must continue to protect our IP and we do not believe that AMD can transfer those assets to a third party without the consent of Intel. We would be happy to sit down and negotiate with GlobalFoundries about a license. However, we cannot do so until AMD and GlobalFoundries acknowledge our rights under the agreement.”
Protective order
Now, AMD wants Intel to lift a demand that the evidence submitted in its US antitrust suit against the chip maker be kept confidential. What is this all about? If it is a demand, why is it being raised?
According to Intel, this is a red herring! “That case has nothing to do with this contract. AMD knows very well that the information in the US antitrust case is confidential under a protective order signed by the Court. AMD was part of the process of drafting that protective order and knows very well that Intel cannot change it nor can AMD.”
Why is it also being said that Intel’s actions have violated the cross-license agreement? The Intel spokesperson said that AMD’s theory is that Intel has breached the agreement by implementing the dispute resolution process outlined in the cross-license agreement. That is not what the agreement says. If AMD is right, then there is no dispute resolution process, which is not the case.
An Intel spokesman had earlier said that the company was willing to make the agreement made public, but said AMD prevented this from happening. I asked Intel to clear its side.
Bound by agreement
Here’s Intel’s response: “In 2001 or 2002, AMD published a redacted (partial) agreement with the US Securities and Exchange Commission. Portions of the agreement are related directly to this dispute, and Intel has suggested multiple times that the entire agreement be published to provide the clarity outlined above. AMD has refused. Intel is bound by that agreement and can’t unilaterally make the rest of the agreement public.”
Quite interesting responses from Intel! Now, I await AMD’s replies.
At the end of the day, all differences should be kept aside, especially during this recession. I am sure, both of these wonderful companies can come to some sort of an agreement and find a way forward for the overall good of the global semiconductor industry.
I know this is not an easy matter, rather, it is quite complicated. However, I feel there’s a way out of each and every problem!
Intel has now extended its request to GlobalFoundries, and AMD, to sit across the table and negotiate with GlobalFoundries about a license. It is sincerely hoped that the two companies can come to some sort of arrangement. There’s no point in making claims and counter-claims through the media, or any other way!
Rebounding IC ASPs and Intel-AMD dispute! Two contrasting sides of semicon!!
Friends, I’d like to draw your attention to two completely contrasting sides of the the global semiconductor industry!
First, there was a significant piece of information last week, where IC Insights highlighted that the IC ASP prices were across several product segments. In fact, IC Insights further goes on to say that while it is unsure whether IC ASPs had reached their low points, IC Insights firmly believes that the IC ASPs will rebound throughout 2009 and well into 2010.
I am reminded of another IC Insights study of late December 2008 where it advised adopting a quarterly outlook! It also forecast a significant rebound in the IC market beginning in the third quarter of the year! Is it already upon us? Too early to say.
Consider this: are these two projections bringing some good tidings for the global semiconductor industry? Perhaps, yes!
Now, a change of scene! Time — early this week!
Intel notified Advanced Micro Devices (AMD) that it believes AMD has breached a 2001 patent cross-license agreement with Intel. According to its release, Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement.
Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so. AMD’s breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement.
Knowing my soft corner for semiconductors, I received a mail carrying AMD’s comment on Intel’s claim. And, it was a counter claim of sorts!
According to Ramkumar Subramanian, VP Sales & Marketing India, AMD: “Intel’s action is an attempt to distract the world from the global anti-trust scrutiny it faces. Should this matter proceed to litigation, we will prove that Intel fabricated this claim to interfere with our commercial relationships and thus, has violated the cross-license.”
I really don’t know what’s happening! Who’s right and who’s wrong? All I understand is that this Intel vs. AMD dispute is simply NOT good news for the global industry.
Both Intel and AMD are companies admired globally. I’ve interacted with executives from both companies, and they are all really exceptionally talented people.
It is important for Intel and AMD to not get drawn into controversies of this stature, especially at a time when the industry is going through a rough patch. I have asked this question of both companies and expect their replies sometime next week, hopefully. And I wish they don’t send me standard replies.
Both of you are sticking to you lines and stands! Can you please take your gloves off and clear this up folks? The industry does not need such things right now!
ISA Vision Summit 2009: Indian design influence, ideas to volume
This post is slightly delayed given the fact that I’ve been travelling! Here it is: Session 2 of Day 1, ISA Vision Summit 2009!!
The still quite young, Indian semiconductor industry has come a long way! Making his opening remarks during the session: Indian Design Influence, Ideas to Volume, Jaswinder Ahuja, Corporate Vice President & MD, Cadence Design Systems India, and chairman, pointed out that earlier, it used to be ‘made by the world, FOR India.’ However, globalization of design has now put India on the world semiconductor map. Today, it is ‘made by the world, IN India.’
The picture here shows Ahuja making a point, while Freescale’s Ganesh Guruswamy, TI’s Dr. Bobby Mitra and Intel’s Praveen Vishakantaiah are all attention.
The electronics systems production is clearly moving eastward. Even though the chip fabs may not happen in India, systems manufacturing is certainly happening. The emerging markets today offer a $5 trillion opportunity. However, the transformative challenge is: how to marry low cost, good quality, sustainability and profitability simultaneously!
Fantastic opportunity for investing in technology
Praveen Vishakantaiah, President, Intel, added that India has a fantastic opportunity ahead for investing in technology. He cited Intel’s examples, such as: products designed in India for global market — Intel Xeon 7400 processor; designed in India for India and emerging markets — Classmate PC, which was prototyped in India; and designed in India and customized for the local market — PoS retail kiosk solution.
Internal factors related to volume development include: unique market needs, designing for reliability, enabling customers — standard globally but varied in India. External factors include: access to customers — which can be challenging in a varied market such as India, access to employable talent, predictable supply chain, robust infrastructure — digital infrastructure should scale simultaneously with design and development, and proactive policies and regulations.
According to Vishakantaiah, there is a need for a call to action and seize opportunities. This means, capitalizing on opportunities for local and global product designs, increase the impact and build end-to-end competencies, and to continue to move up the value chain. There is a need to address the internal factors. This would enable increasing the quality of products and extend local products into global markets. There is also a need to focus on the enabling the local market for global product companies.
As far as the external factors are concerned, there is a need to be proactive to remove barriers. There is a need to also encourage research, faculty development and new curriculum. India also needs to build energy efficient power, logistics and manufacturing capabilities, and also reduce e-waste and think green for all product designs.
Downturn creates huge opportunities
Ganesh Guruswamy, Director and Country Manager, Freescale Semiconductor India, remarked that even the deepest downturns can create huge opportunities for companies and countries. “Continuing to innovate during the downturn is important,” he added. It is therefore, time for India to step up, put the right innovations in place and grow.
He stressed upon several custom solutions for emerging markets, such as two-wheelers, which dominate, e-bikes, which are said to be the future, LED lamps, power inverters, irrigation pumpset powered by solar, smart energy meters, and solar/PV base station and carrier based equipment for telecom.
Medical tourism is an emerging focus area for India, as it is growing by 30 percent each year. Medical tourism is likely to bring $1-2 billion to India by 2012. In this context, Guruswamy highlighted Freescale’s ECG-on-a-chip solution. According to him, the way forward would involve moving away from a design mindset to a product mindset!
Don’t be dwarfed by glamorous industries!
Dr Bobby Mitra, MD, Texas Instruments India, said that India is witnessing a change in its semiconductors agenda — from R&D to R&D + market growth. If followed properly, it can become a game changing agenda. “India has nearly 2,000 OEMs designing electronics products. That’s the untapped potential,” he said.
Most of the customers are smaller companies — the proverbial long tail. They know semiconductors and electronics very well. Such companies need to be measured by the firebrand innovation going on at those places.
Dr. Mitra said: “The products have to be the right kind of products. If they are complex, it is incidental.” He cited defense and aerospace as very strong spaces, while industrial is also an equally strong opportunity area. “We should not be dwarfed by glamorous industries,” he cautioned.
In the near term, the Indian semiconductor industry needs to develop two new stripes. These are: a high degree of customer centricity so it can be brought into the R&D engineer’s minds, and have an application mindset — India is very good in design work; it now needs to develop applications in the current context.
Dr. Mitra also called upon having research as an agenda for the industry. This can be done in areas that would assume importance in future. “By working with customers, we can make products more intelligent, by adding electronics and semiconductors,” he advised. “All of us have a key role to play in this transformation.”
SMEs, in particular, have a major role to play. Intel’s Vishakantaiah said that MNCs would need to mentor and coach such companies. Freescale’s Guruswamy added that MNCs can either help them grow or buy them out.
Dr. Mitra advised that even if customers didn’t provide business, it would pay to remain close to them. He also referred to TI’s Beagle Board, an open and low-cost platform, which enables development of applications. However, he advised the industry to be realistic about mass customization.
Top NAND suppliers of the world: DRAMeXchange
DRAMeXchange has recently released its rankings for the top NAND suppliers of the world. I am producing bits of that report here, for the benefit of those interested in NAND and the memory market.
Be aware, that this segment has been hit particularly bad. We have heard of Qimonda’s problems, as well as Spansion’s. They are trying to battle it out, gamefully, and best wishes to them.
The global semiconductor industry needs the flash memory segment to recover, and fast, to bring the health back in the industry, as well as the missing buzz!
Getting back to DRAMeXchange’s report, NAND Flash brand companies released their total revenue of 2008. Samsung’s annual revenue was $4.614 billion and it gained 40.4 percent market share, to maintain the number 1. position.
According to DRAMeXchange, the annual revenue of Toshiba was $3.25 billion, and its market share was 28.1 percent at the number 2 position. Its market share increased 3.1 percent compared to 2007.
Hynix’s annual revenue was $1.727 billion, with 15.1 percent market share. Though it stayed at the number 3 position, its market share declined 4.1 percent, compared to 2007.
Micron’s annual revenue was $897 million. It had a 7.9 percent market share, which enjoyed a 1.8 percent increase when compared to 2007. Micron was number 4. Intel was at number 5. Its annual revenue was $660 million with 5.8 percent market share, which increased 2.1 percent, compared to 2007.
Numonyx’s (STMicro) 2008 annual revenue was $295 million. It was at number 6 position with the market share of 2.6 percent, which remained the same as 2007.
According to DRAMeXchange, the 4Q08 total revenue of worldwide NAND Flash brand companies was $2.227 billion, which dropped 19.3 percent from $2.761 billion in 3Q08. Under the continuing impact of global recession and the influence of declining worldwide consumer confidence, the 4Q08 revenue of NAND Flash brand companies showed signs of decreasing.
The overall demand and expenditure for consumer electronics declined. Although bit growth in 4Q08 increased 18 percent QoQ, the overall average selling price (ASP) dropped 32 percent QoQ, says DRAMeXchange. A big thanks to DRAMeXchange.
Intel's retail POS kiosk provides unique shopping experience
Imagine walking around a retail store, when you come across a retail POS kiosk, which suddenly springs into life with your image! It also shows you a welcome message, even as you are probably checking out of the store, swiping your credit/debit card on the machine/kiosk, or merely going around the store, browsing stuff!
The POS system then goes on to show you either various alternatives of items for you to choose, either based on your previous shopping experience, or also apprise you of the many new offerings and other great discounts available within the store!
How does this POS system do all of this? Well, there is probably a Star Customer card possibly kept inside your handbag or pocket, which has been provided to you by the store that you have been frequenting so often. As you come in line with this POS system, its in-built sensor reads your customer card and springs into life, and action!
Find this kind of a shopping experience hard to believe? Well, all of this can now be possible, and now in India itself, thanks to Intel’s retail point-of-sale (POS) proof-of-concept system. Intel recently unveiled an energy-efficient retail POS proof-of-concept system, which promises to do these, and much more!
According to Sanat Rao, Marketing Director, Emerging Markets, Embedded Computing Division (ECG), Intel Technology India Pvt. Ltd, this retail POS proof-of-concept system exhibits the latest in digital signage and POS technology in a kiosk form-factor.
This system demonstrates how technology can enhance the retail shopping experience by including customer preferences, real-time inventory access etc. It also demonstrates how the total cost of ownership (TCO) for a retail store can be lowered by using energy-efficient devices. Rao added that the reference design is available for India customers as well.
Need for retail POS
The need is obvious! Legacy POS systems are basically fixed-function devices that are primarily used for billing and retail. These also lack the intelligence about the user preferences.
Besides, the new retail POS system will use significant less power and energy, as compared to the legacy POS system.
Benefits for retail
Elegant and refined, the retail POS adapts and integrates into the retail environment, enabling personalized customer service and an engaging sales experience. Its built in security enables secure transactions as well as additional insurance against theft. The adaptable, eco friendly and modular system boasts of the following benefits:
Reconfigurable system: Configurable as a POS, Kiosk or combination.
Modular design: Swap out components for easy maintenance.
Power savings mode: POS instantly wakes up displaying signage.
Targeted promotions: Unit displays targeted promotions via digital signage. Utilizes prior shopping history with video analytics.
Cross-selling: A sales associate can up sell with related product inventory, promotions, and/or customer reviews.
Interactive product explorations: Customer can explore merchandise, view promotions, read customer reviews, etc.
Remote manageability: eliminates expensive maintenance trips & helps reduce TCO.
The retail POS system uses Intel’s Core 2 Duo 45nm processor with vPro technology. This enables larger CPU Cache (6 MB), enables 70 percent reduction in power, and doubles the amount of raw processing power, and uses next-generation graphics.
The vPro technology enables supporting remote management and diagnostics as well as remote software upgrades and security. Devices can be turned off, as and when required.
India opportunity
Intel’s retail POS system can be used by both organized retail (aka modern retail) as well as the high-frequency retail. For modern retailers, this can be an opportunity to provide a unique shopping experience to customers. Besides, there will be cost-savings through energy efficiency and remote management.
For the high-frequency retail shops, they can expect a trickle-down from the organized sector. Also, they stand to benefit from energy savings and customer preferences. That’s the power of embedded computing folks!
Pradeep Chakraborty 