Compared to where Intel was in the smartphone and tablet market three years ago, the Atom Z600 “Moorestown” series of Systems on a Chip (SOC) puts Intel much closer to the pin. The Atom Z600 performance-per-watt, a key measure in battery-based electronic devices, is now in the mainstream of smartphones. In some cases, such as full HD TV decoding, the Atom Z600 is leading.
As Rob Enderle writes, the smartphone market, for all the oohs and ahhs of the iPhone and iPad, is really in its infancy. The next decade will see literally billions of SOCs used in handheld consumer devices, but also inside machines, automobiles, kiosks, retail displays, and hundreds of other devices — many not yet invented. The PC market is growing nicely again in 2010 at about a 350 million desktop and laptop rate. A half billion PC units in 2012 is a good forecast if the global economy keeps expanding. The cell phone market is a billion units. So whose chips will power the next 10 billion devices? That’s the war Intel is really preparing to fight.
While comparing Moorestown to Apple’s ARM-based iPad is this week’s news story, the longer term for Atom is truly strategic for Intel. SOCs reduce the number of individual semiconductor chips needed to manufacture a gadget, and lower overall costs. Today’s smartphones such as the iPhone are already well-integrated with SOCs. Moorestown has limited SOC integration, making for larger (read “clunkier”), more expensive, and probably poorer battery life in Moorestown gadgets than the more integrated competition. In 2010.
I expect Intel, the world’s best semiconductor fabricator, to make enormous progress in the next two years at world-class SOC integration. There’s a steep technology learning curve to climb, but I see the resources in place at Intel to make this happen — from the Board Room on down. I take for granted Intel’s ability to manufacture in high quantity and quality. And open-source software in the Meego operating system will create a foundation for consumer gadgets, but will always lack the soup-to-nuts closed system employed by Apple.
With the ingredients mentioned above, 2013 looks to me like the show-me year for Intel to break out in Atom-based volumes for consumer gadgets and embedded processors measured in the 100 million chip range — a couple of billion dollars worth of revenue and accelerating.
Recall how Washington’s elite drove out to watch the Union army fight the Confederates in the battle of Bull Run in 1861. We are that elite this week watching Intel’s Atom Z600 take on the ARM-based gadget world. Recall also that the Union lost at Bull Run. But the Union won the four-year war. It’s too easy to ding Moorestown as a single product along a multi-year “get well” strategy timeline by Intel.