I thought the competition among chip vendors was fierce last year. What a difference a year makes.
There are now two major trends affecting the space: Smartphones have become mainstream, and tablets have become all the rage. These changes have been beneficial to chip vendors--they now have a growing base of high-powered devices to sell into. However, it has also exposed some dangers and challenges for the silicon suppliers. One of the key problems is that chipset vendors have to engineer more or less the same solutions for a wide range of devices.
"What they face is a dilemma," Jim McGregor, an analyst at In-Stat, told me. "They're building in capabilities to differentiate their products for different applications or different usage models, but the devices aren't going to diversify for another few generations." In other words, for every Sony Ericsson Xperia Play out there, there are half a dozen smartphones that are essentially the same when it comes to use cases.
Given this, chipset vendors must compete on discrete areas of power and performance (in addition to price). Consider just one of the latest battlefields: asynchronous processing. Asynchronous processing basically means that a processor with multiple cores can have each of those cores clocked to run separately at different speeds, allowing them to run independently of one another. This means that when one core needs to be shut down because it is not being used, the device can do so without interfering with the functions of the other core. Qualcomm (NASDAQ:QCOM) has touted this advantage in its new generation of dual-core Snapdragon processors.
Nvidia and Texas Instruments, two of Qualcomm's chief rivals, argue against asynchronous processing. They contend that the faster cores have to wait to synchronize to ensure that the data they're getting from the slower cores is valid, and that delay can negatively impact device performance. Another claim is that there is uncertainty over whether the mechanism should be controlled via hardware or software.
"They are splitting hairs," said Forward Concepts analyst Will Strauss. To some extent, silicon vendors have always competed on fronts like this, but now more than ever this minutiae matters when power is at a premium and the focus is on convincing OEMs to use your solution before a competitor muscles into a new generation of devices.
Looming in the background is Intel, the world's largest chip maker, which has vowed to make a splash this year in smartphones and tablets after being largely silent for years. However, it's unclear whether Intel will be able to break into a hotely contested market segment.
I've explored all of this and more in a new feature on the state of the chipset market. Please have a read and let me know your thoughts. --Phil