Inside the 3G iPhone - revisiting my predictions
Sunday, July 13, 2008
Here is the photo of the iPhone 3G chipset as dissected by TechOnline -
Prediction #1: As this photo indicates, Infineon emerged the cellular chipset winner. The analysts are not sure if it is the PMB 8878 since they had no way of comparing the iPhone component with a known sample of the Infineon 3G baseband offering. They found that the baseband was a two-chip, single package solution. They further identified it as the 2G chip and a 3G accelerator.
For the moment, I have no reason to suspect that this is anything butthe PMB 8878. I don't believe that Infineon would have a chip customized for Apple. On the other hand, the company perhaps quickly cobbled together a 3G solution in the form of a two-chip PMB8878 to cater to the market needs (including those of Apple.) Given the long cellular product cycle and the tight iPhone schedules, this would have been the path of least risk as compared to spinning single chip solutions. For the record, Infineon recently announced smaller and more sophisticated 3G solutions with its own software stack. These latest chips (that are not in the iPhone) are likely the more thought out, and more optimal single chip UMTS solution.
The two-chip solution inside the iPhone 3G further brings back the question I have been asking for a while now. Does the 3G IP in Infineon partially or wholly belong to InterDigital? It could well be that the iPhone has many if not all elements of the SlimChip IP from InterDigital. Apple's license with InterDigital last year will then have deeper implications than the normal 3G license that the King of Prussia-based company seeks from handset vendors.
While the exact details will emerge in the coming days, my prediction #1, "Infineon will be at the heart of the iPhone. " has turned out to be true.
Prediction #2: "Samsung will perhaps continue to own this part. " Not much surprise here as the iFixit teardown revealed last Thursday. Prediction #2 was true too.
Prediction #3: Before we discuss WLAN and Bluetooth, here is a second picture from TechOnline -
So, as it turns out, Apple yet again went with Marvell for WLAN. Prediction #3, "For platform stability issues, I will bet on Marvell grabbing this socket again." was right.
Prediction #4: "If WLAN belongs to Marvell, CSR, which is in the current iPhone, will likely own the Bluetooth socket again." A look at the figure above will make it 4 on 4 so far.
Prediction #5: The 3G iPhone carries the Hammerhead II GPS solution co-developed by Infineon and Global Locate, the company that was bought by Broadcom last year. So, that makes my prediction #5 - "The next generation will have GPS and it will likely belong to Broadcom" - right too. I don't know the specifics of the licensing agreement between Global locate and Infineon. So, I will not be able to comment on whether BRCM will benefit from this component, if at all.
Prediction #6: The touchscreen controller belongs to Broadcom as well.
In summary, all six iPhone predictions I have recorded in this blog have come out to be true. As you can see, I based my prediction on most of these components on the rationale that Apple will not want to hamper the stability of the 3G iPhone by testing out new components in a short time span. As it turns out, most of Apple's component decisions were based on this very logic and is aptly pointed out by the TechOnline article.
[PS: For a more thorough look into the component dissection, please visit TechOnline's site]
[Disclosure: Long IDCC at the time of writing]
Disclaimer: All thoughts expressed by Vijay Nagarajan in his articles are his and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.
Infineon cellular chipset in iPhone 3G
Thursday, July 10, 2008
I am hopefully not jumping the gun but here is what I read from the photos that iFixit has posted-
While the folks who did the dissection have so far identified the Infineon Smart3i chip, I think the photo of the chipset also indicates the Infineon 608 baseband. The chip with the part number 337s3394 is very likely the PMB8878, or XGOLD 608. This is further corroborated by the 608xx labeling on that chip and also a similar part from the last iPhone that was identified as the S-GOLD2 baseband processor.
This perhaps confirms something that I have been predicting for around a year now. Infineon's chipset is in the 3G iPhone and by extension, InterDigital's 3G protocol stack is also in!
InterDigital - More good news on its way?
Monday, July 7, 2008
InterDigital, the King of Prussia-based wireless company, saw its shares jump by about 5% last week when the S&P and Nasdaq were down by around 2%. The reason for this optimism was the news that InterDigital and Nokia have agreed to end two legal proceedings in the
In July 2005, Nokia asked a London High Court declare InterDigital's intellectual property as non-essential to UMTS (3G standard encompassing WCDMA and HSDPA). InterDigital, in turn, filed a suit against Nokia in December 2006. The companies recently decided to drop these lawsuits. The terms of the agreement are unknown. Besides, the companies continue to be at loggerheads in front of the
For Nokia, it means lesser distractions from its focus of retaining and growing its mobile market share and its fight to match new niche players like Apple. For InterDigital, ending the
I see the amicable end to the
Like I have said before, I don't doubt that IDCC has important 3G IP. It is more a question of when and how much the industry is willing to pay for it. Maybe we will know many of these answers over the next few months. Earlier coverage on InterDigital can be found here, here and here.
For me, like for many other InterDigital investors, this week will answer some other questions to bring more good news. This Friday, I will watch out for the many 3G iPhone teardowns that will follow its world-wide release. If my analysis is right, we will see InterDigital's 3G protocol stack inside the new iPhone. IDCC is guaranteed per-unit royalty from Infineon for each of its 3G chipset sold. I will let you guesstimate what it means to InterDigital's revenue for the next few quarters!
[Long IDCC at the time of writing]
[Disclaimer: All thoughts expressed by
Infineon - Company Overview
Tuesday, June 17, 2008
[Originally for Sramana Mitra's site]
We have, over the past year, presented detailed valuation theses for various mobile chipset vendors namely Qualcomm, Texas Instruments, Broadcom, InterDigital, Marvell and STMicroelectronics. This matrix will not be complete without Infineon – the German Chipmaker.
Infineon shot to the spotlight in the wireless world as it was discovered to be at the heart of the sensational first generation iPhone. I also think that Infineon will continue to hold this socket in the 3G iPhone to be released on July 11th. I am betting that Infineon’s XMM6080 platform and its PMB8878 chip (formerly known as S-GOLD3H and now marketed as X-GOLD608) will be in Apple’s darling product that was announced amidst much fanfare and expectations recently.
While the iPhone has been Infineon’s public face around the world for the last year or so, its business interests are much broader spanning automotives, industrial applications, and memory among others. The company was founded in the summer of 1999 as a wholly owned spinoff of Siemens AG following the latter’s huge losses in the fiscal year 1998. Infineon Technologies AG was listed as an IPO on the Frankfurt and New York Stock Exchanges in 2000. Today, iSuppli ranks Infineon 10th in the list of worldwide semiconductor suppliers.
The company is broadly divided into three business segments –
Automotive, Industrial and multimarket segment designs, develops and manufactures and markets semiconductors and complete system solutions for automotive, industrial, security applications and customer-specific applications. The continuing demand for high power products for industrial applications, increased sales of energy efficient products and an increased demand for government ID applications are attributed as growth drivers for this segment.
The Communication segment offers a range of ICs, other than semiconductors and complete system solutions for wireline and wireless communication applications. Wireless chipsets are a mainstay of this unit. Beaten up over the past two years by the insolvency of BenQ’s German subsidiary, the company is trying to recoup by building its IP and product base mainly through acquisitions. Besides Apple, Infineon phone platform customers include ZTE, Panasonic and LG.
Qimonda was legally separated from Infineon in May 1, 2006 into a stand-alone company manufacturing memory products. This segment has been Infineon’s Achilles’ heel from the day one. In fact, Infineon’s inception was forced because memory price erosion led to a $674 million pre-tax loss posted by Siemens Semiconductor in 1998. Even in 2007, a drastic 29% decrease in DRAM prices hurt Infineon’s prospects. The German chipmaker, realizing this bottleneck is starting to dilute its ownership in Qimonda.
With this brief overview of the company, we will look at the company’s financials, business segments, strategy and valuation in the sequels.
More 3G iPhone observations
Tuesday, June 10, 2008
Forgive me for the barrage of posts, but I feel it would be better to put my thoughts down here before they either become obsolete or irrelevant (or both.) So here are a few more points to think about.
Firstly, AT&T is subsidizing the iPhone for us. This means that AT&T is paying Apple for the iPhone. Some estimates run up to an extra $200. Apple, in turn, has given up its cut from AT&T service contracts (contrary to my earlier speculation here). AT&T has increased the data plan by $10. So, the total cost of the new 8GB iPhone will still be $199+$240 = $439 for a 2-year contract. But most consumers will look at this increase as a premium that they will pay for 3G. For them, the bottomline will be that they are getting a very cheap iPhone at $199. VentureBeat has a nice post on this topic here.
The second point I wanted to make was on the 3G comparision demo. Apple showed that the iPhone was 36% faster than two competing 3G phones. I posted that this may reflect the capabilities of the modem design. As it turns out, that theory is not bullet-proof. In response to Om Malik's question on AT&T's 3G network capabilities, the company's mobility chief, Ralph de la Vega said that he is confident of being able to deal with the demand. Further, he said " We have a maximum throughput of 3.6 Mbps and soon it will be 20 Mbps. The core of the network is going to run faster as well." This piece escaped my earlier analysis. If the AT&T network currently runs at a maximum of 3.6 Mbps, then an advanced receiver in the iPhone (that supports up to 7.2 Mbps) should have minimal impact on the results. So, now I am left wondering where, if outside of the
I will post more thoughts as I think through this further. Perhaps, I will consolidate these observations into a single post in the future. Until then, I hope you find these tidbits and commentary useful.
A note on 3G iPhone's GPS
My first premise is that Infineon's XMM6080 platform will be in the 3G iPhone. Now, if we look at the product brief of the XMM6080 here, the block diagram clearly states that the GPS capability of this platform comes from "Infineon/Global Locate A-GPS Hammerhead PMB2520/25." As we all know, Broadcom acquired Global Locate last year.
This is my simple argument that Broadcom owns the GPS slot in the 3G iPhone. Counter arguments, anyone?
iPhone 3G - $199 wins my support (UPDATED)
Monday, June 9, 2008
The 3G iPhone is here. Well, almost here! Steve Jobs announced the latest avatar of the iPhone in his WWDC keynote today. Unfortunately for the users and technology enthusiasts, the phone is not out until July 11th. In any case, let us quickly look at the tidbits thrown at us during Steve's talk.
The 8GB 3G iPhone will indeed come with the $199 price tag. Other models are also lower cost than before. This is perhaps an industry changing move by Apple which has sought to bring smartphones to the mass market. It has, in the process, also shed the exclusivity tag that accompanies most of its products. The $199 tag is likely below the phone's manufacturing cost. So, it looks like AT&T is subsidizing it for us. Besides, I am sure that Apple will make money through the plethora of applications that are lined up for the iPhone apart from the AT&T service contract itself. Essentially, there seems to be a change in its iPhone business model. Apple, while choosing volume over margin with this move, will have to be cautious not to repeat Motorola's mistakes with the highly successful yet unprofitable Razr line of phones.
The 3G iPhone will be GPS-enabled. This clearly puts gadgets like Garmin's Nuvifone at a disadvantage. The phone also boasts good battery life. It has 5 hours of 3G talk-time, 5 to 6 hours of data browsing, 7 hours of video, 24 hours of audio. Not to mention the highly anticipated enterprise support that will have RIMM gritting its teeth.
OLD: This is the old version of the paragraph. I have updated this with more accurate information and have it below. Please read that......[The 3G data speed demo gave clues about the iPhone's modem capabilities. Steve showed that the iPhone was about 36% faster than the Treo 750 and the Nokia N95. The caveat is that these popular phones are based on slower WCDMA and are not HSDPA-enabled. For the uninitiated, WCDMA stands for Wideband Code Division Multiple Access and is the 3G migratory path for GSM carriers. HSDPA stands for High Speed Data Packet Access (HSDPA) and is a higher speed data optimized evolution of WCDMA. So, while not being a fair comparison, it demo showed that the iPhone supports HSDPA. I would personally have wanted to see how the iPhone performed against other HSDPA phones. That would have given me a better metric to evaluate the modem and also obtain clues about the baseband supplier.]
UPDATED: The 3G data speed demo gave clues about the iPhone's modem capabilities. Steve showed that the iPhone was about 36% faster than the Treo 750 and the Nokia N95. Nokia's N95 is HSDPA-capable. Palm also unlocked the Treo 750 to support HSDPA. (I am still a little hazy about the Treo specs. and would welcome additional information that you can provide me on this.) For the uninitiated, HSDPA stands for High Speed Data Packet Access (HSDPA) and is a higher speed data optimized evolution of 3G. So, Discounting any improvements provided by the OS and the browser, the demo suggests that the iPhone has a higher capability HSDPA receiver. A friend suggests that the difference in performance may be because the N95 uses a category 6 HSDPA receiver capable of download speeds upto 3.6 Mbps. The iPhone looks to be having a Category 8 receiver capable of 7.2 Mbps. This does give me clues about the baseband supplier. While multiple vendors including Qualcomm and InterDigital have Category 8 receivers, this comparison gives me more confidence that Infineon's X-GOLD-608 is central to the 3G iPhone.
The $199 tag is great news to me. I was looking to get the iPod Touch and a GPS device anyways. I will wait for my Sprint contract to expire and quickly grab one of these from an Apple store. I am not alone. All colleagues and friends I talked to today are quite bouyant. People who don't have the 2G iPhone are waiting for July 11th. Those who paid a high premium for the previous iPhone are still willing to trade theirs for a newer, sleeker and faster big brother. The 10 million iPhone target will now be a rather conservative estimate.
How to look for IDCC in 3G iPhone?
Sunday, June 8, 2008
The 3G iPhone is expected to launch soon at the WWDC. One of the primary component winners likely is Infineon. The company’s cellular chipset is expected to drive the iPhone. As we wait for the teardown, I was asked by a good friend how we would know if IDCC is in the iPhone. He specifically wanted me to address the issue with respect to the latest IFX 3G product announcements. Here is my take on it.
Firstly, IDCC will get licensing fees from Apple as per agreements signed last year. The agreement covers 2G and 3G iPhones to be sold in the near future. So, irrespective of whose 3G components are in the iPhone, IDCC gets money from Apple.
Secondly, there will be money coming if Infineon’s 3G baseband is in the iPhone. In light of the recent product announcements by Infineon, I need to be careful when I make that statement. So, let me step back and reflect on the impending 3G iPhone. I wrote in the past that I expect to see the MP-EH platform with the S-GOLD3H baseband chip in the 3G iPhone. The company has rechristened its products since. The HSDPA capable MP-EH platform is now the XMM 6080 while its 3G baseband chip - PMB8878 - previously known as the S-GOLD-3H (H indicating HSDPA capability) is now the X-GOLD 608. Read more on this subject here and here.
Further, the 3G software stack that will be used in the MP-EH/S-GOLD3H combination was jointly developed by InterDigital and Infineon’s subsidiary Comneon. So, IDCC will get per-unit royalty from Infineon for use of the stack. While the software collaboration is public, I am inclined to speculate based on recent modem performance data that IFX 3G chips use some baseband receiver design IP from IDCC. This can be an additional source of per-unit royalty for IDCC.
Recently, Infineon announced an array of X-GOLD61x HSDPA/HSUPA products that drastically reduce on power and space apart from catering to multiple phone market segments. Furthermore, the company also announced specifically that the stack for the X-GOLD61x solutions is internally developed. While this announcement gives more design control to Infineon, it implies that IDCC will not receive per-unit royalties for the software stack on the 61x series. On the other hand, I am still bullish (read speculation) about the use of IDCC’s physical layer receiver IP in all of Infineon’s 3G offerings. Also, while I think these new products are part of Infineon's push to hold on to Apple for future designs in the face of increasing competition, I would be greatly surprised if I see any of these 61x chips in the first 3G iPhone.
In summary, look to see if the iPhone teardown reveals Infineon’s PMB8878/X-GOLD 608/S-GOLD-3H baseband. So, the best case scenario for IDCC is for the iPhone to have a heart of Gold! Even otherwise, the King of Prussia-based company will gain from Apple’s licensing fees.
3G iPhone predictions recap
Thursday, June 5, 2008
We are less than a week off from the Apple Worldwide Developer's Conference 2008 (WWDC) in which the 3G iPhone is expected to make its debut. I have, over the past year, covered the 3G iPhone in great detail. As we head to the WWDC, I thought it will be nice to compile my iPhone predictions about some component suppliers. Take them for what they are - just predictions!
3G Baseband: Infineon will be at the heart of the iPhone. The Infineon 3G chip will have a software stack that is jointly developed with InterDigital. The King of Prussia-based InterDigital is also likely to have a good portion of the baseband IP if my guess is right. I am basing this last speculation on the performance of the IFX chipsets in recently conducted tests.Essentially, InterDigital will earn a per-chip royalty for the software stack and possibly for the baseband IP. For more details on the 3G baseband supplier analysis, I will direct you to my article here.
Application Processor: Samsung will perhaps continue to own this part. Marvell has an outside chance.
WLAN: For platform stability issues, I will bet on Marvell grabbing this socket again. Broadcom may spring a surprise with its WLAN-BT-FM integrated solution.
Bluetooth: If WLAN belongs to Marvell, CSR, which is in the current iPhone, will likely own the Bluetooth socket again.
GPS: The next generation will have GPS and it will likely belong to Broadcom. This was recently ratified by a GigaOm report.
Touchscreen: Broadcom
I cannot hypothesise on other components. But if I were to guess, I will bet on Apple retaining most existing suppliers. While I have been talking about these component suppliers for around a year now, some of these predictions may appear matter-of-fact to readers today. In any case, now that I have put it all in a list, let us see what my hit-rate is!
[Long IDCC at the time of writing] Read the full article>>
Infineon, Marvell and the iPhone
Monday, June 2, 2008
Apple is expected to announce the 3G iPhone this month. Based on a reasonable set of assumptions, I have speculated that Infineon will continue to be at the heart of the iPhone. Clues that ratify this scenario have also been uncovered in the recent months. Recently, however, there were two industry events that made many question this theory. Here, I will take a look at these events and what they signify for the iPhone.
Firstly, Sehat Sutardja, Marvell’s CEO, had this to say in the company’s F1Q09 conference call –
“During the first quarter we achieved what I believe to be a very important milestone as we began volume shipments of our HSDPA communication processor to a key smartphone customer. We expect a steady ramp to high volume production throughout the remainder of the year.”
With the name of this ‘key smartphone customer’ not revealed, Apple and iPhone immediately got tagged to this remark. To me, the matter-of-fact statement appeared to reflect Marvell’s continuing relationship with RIMM.
The latest Blackberry Bold 9000 features Marvell’s Tavor platform. Tavor is a single-chip solution that combines a HSDPA baseband processor with a 624 MHz applications processor. The timelines of the Bold launch and Marvell’s shipment dates seem to corroborate as well. The RIMM angle, coupled with the difficulty in launching and testing a new platform with Marvell for the existing form-factor iPhone makes me believe that the Santa Clara-based company will not displace Infineon in Apple’s darling phone.
I will, however, not dismiss the possibility of Apple launching a second, smaller form-factor 3G phone with Marvell’s solution. Marvell’s Tavor may be ideal for a low-cost phone from Apple. The single chip will eliminate the need for a separate application processor. It will save space and power. Hence, it (or any single chip solution for that matter) will be a preferred solution a low-cost iPhone, if there is one. I also anticipate that Marvell will be able to bundle Tavor with its WiFi solution giving it a price advantage. So, in the eventuality of two iPhone models being launched, it is possible that both Infineon and Marvell have design wins at Apple.
This brings me to the other iPhone related news – the Infineon warning. The German company recently warned that it has received lower than anticipated orders for a project to supply HSDPA chips. Going with the premise that Infineon is indeed the 3G supplier for the iPhone, it is hard to tell if this warning pertains to Samsung or Apple or another customer. If it is for Apple, then, contrary to what is being written elsewhere, I don’t think it signifies any major delay in the anticipated launch of the 3G iPhone.
This may, however, signal one of two things. The first possibility is that Apple may not market the 3G iPhone as widely as anticipated (at least initially.) The second possibility, which ties up with the Apple angle to the Marvell statements is product mix. Apple may be planning on a staggered, complementary launch of two 3G iPhone models. This, in turn, could be the reason behind the lower volumes shipped by Infineon and the perceived secrecy associated with Marvell’s ‘key smartphone customer.’
iPhone Air hybrid in the works?
Thursday, May 15, 2008
Apple-related rumors always add spice to your day. As we all anticipate the 3G iPhone’s release any day now, we are seeing a steadily increasing spate of news, rumors and ‘leaks’. ZDnet.de reported this iPhone story recently – “As part of an Intel event for the 40th birthday of the semiconductor company at Munich’s BMW World, Germany managing director Hannes Schwaderer confirmed today what has long been a rumor on the Internet: namely, that there is an iPhone with Intel’s new Atom chip. The device is slightly larger than the current version, Schwaderer said. That is not, however, because of the Intel chip, but because of the larger display used in the new iPhone.” Apple 2.0 blog published an anatomy of this rumor, in which it points out that Intel specifically disclaimed the ZDnet report. Intel’s PR stresses that the Intel Germany CEO mentioned the iPhone of the future as an example of mobile internet devices (MIDs). 
fter all has a place in the Cupertino-based company’s immediate convergence plans. When Intel and Apple made a big deal about the packaging effort that went into miniaturizing Intel’s Core Duo 2 processor for Air, it sounded as if something ‘more mobile’ was brewing. 
What is 3G iPhone anyway?
Wednesday, May 14, 2008
A friend posed this iPhone question recently –
“Could the iPhone run on CDMA with the Infineon chip that will be in the 3G GSM phone? Or would different hardware and/or software be required?”
I thought I will publish a tutorial to benefit all my readers. This is my view of the wirelss standard we will see implemented in the 3G iPhone.
There are two pervasive wireless standards that support 3G -
- The third generation partnership project (3GPP) has defined 3G as the CDMA-based evolution of GSM. So, GSM networks (e.g. AT&T in the
- The Qualcomm-promoted CDMA2000 1x standard is part of the 3GPP2. Qualcomm calls its CDMA2000 1x as 3G. High throughput data capabilities have been added in the various revisions of EV-DO. Hence EV-DO is considered a natural evolution path for most CDMA2000 1x based networks (e.g. Sprint, Verizon)
- 3GPP Release 5 compliant dual-mode protocol stack
- HSDPA with up to 7.2 Mbps for downlink
- WCDMA 384 Kbps for uplink and downlink
- Backward compatibility with GSM/GPRS/EDGE
- WCDMA/HSDPA will be the dominant 3G standard moving forward. This will allow Apple to address most markets
- In the
InterDigital exceeds expectations, expresses iPhone hopes
Thursday, May 8, 2008
InterDigital announced its First Quarter 2008 results yesterday. The King of Prussia-based company beat analyst expectations this quarter, addressed the Nokia and Samsung litigations and also hinted about its 3G iPhone presence.
The total revenues for the First Quarter 2008 were $56mn down from $67.8mn in First Quarter 2007. Last year’s number however includes $18mn royalty audit findings and 2G royalties from Sony Ericsson. This year’s revenues include $55.5mn in recurring revenues, $53.3mn of which comes from patent licensing royalties. The net income was $7.3 million, or $0.15 per diluted share. This is almost double of the analyst consensus of $0.08 per diluted share.
InterDigital’s operational expenses for the quarter were at $45.1. The company has a healthy cash position of about $240mn and continues its share re-purchase program. LG, Sharp and NEC together account for 54% of the recurring revenues while RIMM, HTC, Sierra wireless and Option also have solid licensing deals with the company. While it did not give the revenue outlook for the next quarter yet, InterDigital forecasted that the non-litigation operating expenses (associated with SlimChip R&D and marketing) would grow sequentially between 4-8%.
On the product front, the company executives are positive about the technology IP licensing agreement with the ‘growing Asian semiconductor company’ that it hopes will increase its footprint in the Asian markets. The company’s HSDPA technology to NXP is moving into production and would now expand its presence given NXP’s merger with STM. Even while it continues IOT and performance testing with its current product, InterDigital asserted that its next product scheduled for 2009 was also well into development. This cost-down, better performing product targets not only the data-card and embedded market but also the smart-phone and the high-end feature-phone market.
On the licensing front, InterDigital continues to battle Nokia and Samsung. It has moved to sever the two cases with the
I also looked to pick up clues on the impending 3G iPhone during the call. CEO William Merritt was bullish in his prepared remarks mentioning “based on public report, [Infineon’s] good positioning for the iPhone 3G business.” This, as Bill points out, is attractive for InterDigital due to its per unit 3G software licensing deal with Infineon. The company was also hopeful that Infineon would win the 3G iPhone socket since it will be “a nice contributor to revenue.” My take –the CEO will not mention the iPhone in his prepared remark unless he is confident about Infineon. It appeared to me he was playing safe and yet wanted to give the InterDigital investors a clue of what was in the offing. I see this as yet another ratification of my 3G iPhone-Infineon-InterDigital thesis which you can read here.
The company’s product marketing strategy also struck the right chord with me. It mentioned that it was in talks with application processor companies. The plan is to bundle its SlimChip solution with powerful application processors for the smart-phone market. This is something that I have been advocating that InterDigital has to do. As I have mentioned here, there is a great synergy with TI. It will serve the best interests of both these companies to partner for 3G. This TI+InterDigital bundle (or even a custom-OMAPVox solution) can find itself in Nokia smart-phones.
[Long InterDigital at the time of writing. All thoughts expressed here are those of the author's and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.]
More than one iPhone?
Tuesday, May 6, 2008
Apart from the 3G iPhone that I have been covering in great detail on my site, the possibility of a smaller, lower-cost version is reasonable. Like the 9to5Mac article rightly updates us, it is a question of when and not whether a second model is on its way. From Apple’s perspective it makes good business sense to offer an entry-point into the emerging markets. It does not have to be a feature-rich iPhone. It is also unlikely to be 3G-capable. If I were to guess, I would expect it to be an easy-to-use, utilitarian iPhone which also doubles up as an iPod.
Apple will likely leverage its development effort on the current Infineon platform to launch this version rather than starting from scratch with another vendor. The Apple brand and the iPhone enigma will help sell these phones in newer markets thus expanding its penetration. At this point, I don’t have ideas on its feature-set, pricing and of course, its launch date.
We can also expect that Apple will upgrade its current line of iPhones. We are probably looking at models with more memory and stereo Bluetooth among other enhancements.
In summary, I have merely extended Apple’s iPod product strategy here. The product features I have mentioned are more an incomplete wish-list if anything. As for the actual product line-up and their features, we will have to wait for the moment of truth when they are launched.
Disclaimer: All thoughts expressed here are those of the author's and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.
3G iPhone and Qualcomm
Sunday, May 4, 2008
[Originally for Sramana Mitra's site]
The 3G iPhone rumors are getting more frequent by the day. We all know it will hit the market. It is just a question of when. I have, in the past, looked at the likely component vendors for the impending iPhone including Infineon and InterDigital. As requested by one of our readers, we take a look at a company which will gain from the 3G iPhone, even without a single component inside it - Qualcomm.
With a substantial portion of the 3G intellectual property (IP), Qualcomm stands to make royalty money from every CDMA-based phone sold around the world. Three out of four phones in the 2010-2011 timeframe are expected to be CDMA-based. Quite obviously, this includes the impending 3G iPhone.
If a 3G iPhone is available in the next couple of months, I estimate about 2.5 million units will be sold. This number is expected to climb to about 17.5 million units in 2010. With a conservative selling price of $350 and a royalty percentage of 5%, Qualcomm stands to make close to $44 million this year and as high as $300 million in 2010 just on iPhone sales.
Both Apple and Infineon (whose chipset, I am betting, is central to the 3G) will certainly be aware of this situation. Infineon purchased Agere’s mobility products business from LSI last year. This acquisition, as Will Strauss of Forward Concepts points out, brings with it a huge body of patents (including 3G) from Agere’s Bell labs legacy. Besides, Infineon has a strong ally in InterDigital, the IP powerhouse which supplies the 3G stack for Infineon chipsets. Apple also signed licensing agreements with InterDigital last year for 2G and 3G iPhones.
While it appears that the iPhone camp has a good IP position, it does not obviate the need for a Qualcomm license. The combined patent portfolio of Infineon and InterDigital will help bring down the net money flowing into Qualcomm’s coffers. However, it is unlikely that this number will become public knowledge. We will also not know what percentage distribution of this fee as paid by Apple or Infineon.
This brings us to an interesting question that our reader asks – “Is there an upcoming legal battle coming? Interesting since recently qcom and apple switched top lawyers.” It is true that Apple lost its general counsel Donald Rosenberg to Qualcomm last September. But I will desist from drawing connections to a potential legal battle. A legal bickering between the two technology heavyweights just because it is a lose-lose situation. Qualcomm, while vigorously defending its IP, would prefer to be in the good books of Apple hoping for a future design win into the iPhone or other convergence devices. With Nokia’s 40% market share seemingly out of its reach in the short-term, Qualcomm will attempt to grow its market share with new vendors, Apple being a prime candidate. I am sure that Apple, a stickler for performance and technology leadership, will also understand that Qualcomm can be an important partner in the longer term. So, the most likely scenario is a low profile licensing agreement between the two.
In summary, Qualcomm stands to gain from the 3G iPhone irrespective of whose chipset is being used. I highly doubt a legal showdown, least of all based on the general counsel’s move. As for the exact licensing terms, we will never know. This secrecy not only adds to the enigma of Apple’s product strategy and margins but is also crucial to the success of Qualcomm’s business model.
Read the full article>>3G iPhone's WiMAX rumors
Thursday, May 1, 2008
Craig Mathias wrote a piece last week on 802.21, a convergence standard promoted by the likes of InterDigital and Intel. Folks at 9to5 Mac immediately saw the iPhone connection and hatched what I thought was a highly speculative story. That Apple will push this yet official standard to include WiMAX into its impending 3G iPhone, based on convenient interpretation of a series of events, is the work of a very creative mind.
For the uninitiated, 802.21 is one of the various standards being promoted for convergence. So, if the infrastructure is in place, devices using this standard will perform ‘vertical’ handovers across the standards such as WiFi, WiMAX and 3G.
Before I move on to argue why I don’t see signs of a WiMAX-enabled iPhone yet, I should mention that as a fan of the convergence movement, I would love for one of the convergence standards to succeed. The idea of an iPhone enabling this seamless mobility does sound very appealing to me. Just that I don’t see the impending 3G iPhone implementing it to include WiMAX.
Let me dissect the evidence that the 9 to 5 Mac article presents to defuse the speculation –
“In March, that company revealed it has signed-up Apple (and RIM) as a licensee for its 3G technologies….. This news generated sparks of speculation that InterDigital’s SlimChip architecture might be deployed in products from Apple.”
The license agreement between Apple and IDCC is perhaps two-fold. Firstly, it is for the 3G intellectual property. Secondly, as I have written earlier, the iPhone will most likely have Infineon’s 3G chipset. Infineon, in turn, uses InterDigital’s 3G stack for which the latter gets a per-unit royalty. I think that Infineon’s solution has InterDigital’s contribution to the baseband design. But to think that the SlimChip will be central to the iPhone based on these signs is a stretch. In any case, 802.21 support or WiMAX is independent of SlimChip. You can read more about my iPhone 3G speculations here.
Promoting a mobile standard is a much more complicated task. With WiFi, you are talking about interfacing with the consumer directly. With mobile-phones, the effort needs the confluence of the chipset vendor, handset vendor and the carrier. Also, InterDigital joined the WiFi alliance because of the technology’s role as a key component for 802.21. Neither this nor its modem technology licensing moves should relate to the iPhone.
While the idea of WiMAX+3G is great on paper, the logistics involve high-levels of risk that Apple will be unwilling to take. Platform stability and testing issues will limit Apple’s short-term options for iPhone. Hence, Infineon and most others who have already been designed into the current iPhone will retain their places. We will perhaps see GPS capabilities, but WiMAX, in my mind, is a non-starter for this version.
Infineon, InterDigital in iPhone 3G?
Wednesday, April 9, 2008
The web is abuzz with the news that the latest iPhone 2.0 beta software revealed whose chipset was at the heart of the impending 3G iPhone. The fairly innocuous and cryptic word ‘SGOLD3’ embedded in the code points to Infineon’s SGOLD-3H baseband processor. While this is news for many enthusiastically expecting the 3G iPhone, it is only a confirmation of what I have been saying since last fall – Infineon and InterDigital will be at the heart of the next iPhone.
While Infineon’s SGOLD-3H appears to have been the default solution for the 3G iPhone, Apple definitely will not regret its choice. The Infineon solution is a Category 8 HSDPA solution, meaning that it supports incoming data rates (equals download speeds) of up to 7.2 Mbps. It has a fractionally spaced equalizer implementation of the receiver (which I think is predominantly InterDigital’s IP) that allows the realization of nominal data rates in mobile conditions. Not surprisingly, Infineon was one of the three companies picked as the 3G performance leaders by Signals Research. You can read more of my SGOLD3 musings here.
It is also important to acknowledge the other winners if the MP-EH and SGOLD-3H are in the next iPhone. First and perhaps the biggest will be InterDigital. Infineon’s 3G solutions use InterDigital’s stack. InterDigital is bound to get per-unit royalty and its deal with Apple last summer is a good pointer towards this direction. The
Marvell, I think, will continue to supply the WiFi provided the interoperability issues it faced with its previous offerings are ironed out. With the Garmin Nuvifone round the corner, it is quite possible that iPhone will have GPS too. Broadcom is in a nice position to offer a bundle of its WiFi, Bluetooth and GPS offerings and may come out a big winner despite losing on the baseband front. As with the chipset itself, I expect Apple to retain most current component vendors who have met Apple’s serious performance expectations last time around. More on the iPhone 3G potential features can be found here.
[Long InterDigital at the time of writing]
My iPhone predictions coming true
As Arun Demeure pointed out to me, it looks like my iPhone predictions about Infineon and hence InterDigital being in the 3G version slated for this summer are coming true. You can read the eetimes article here.
I mentioned this possibility back last summer and fall. I will post a detailed article later today. But until then, you can read my earlier coverage and predictions here, here, here and here.
You can also read my earlier iPhone 3G coverage here and here.
Apple and the 10 million iPhone target
Thursday, March 6, 2008
Apple, in the meantime, is not leaving any stone unturned. Today, it announced that it was modifying the iPhone to support Microsoft Exchange Server along with extra security features. This, the company hopes, will compete head-to-head with the Blackberrys and the Treos that the business population loves for their mobile email services. Now, will this not boost iPhone sales, bringing to its fold some of the folks who shunned it for want of corporate email support?
And then, of course, despite the lack of any announcement, the iPhone v2 (3G) will come soon. In my mind, this development is more definitive than speculative. I think the only reason Apple did not announce the iPhone v2 is because such an announcement will halt the sales of the current generation of iPhones. Will you buy a 2G iPhone if you know that Apple's 3G iPhone is hitting the market in another month, say? The lack of a definitive date will, on the other hand, allow for a smoother transition to 3G units and an unhindered march to the 10 million target.
So, in summary, the present indicators coupled with the 3G iPhone launch sometime this year, make the iPhone sales target very achievable.
Nuviphone - Not yet new iPhone!
Monday, February 4, 2008
I have always liked the idea of combining GPS and a mobile phone. You can read my earlier articles back in July last year on integration where I mention that GPS will be a staple in tomorrow's phones. It was only a matter of time before someone came up with mobile GPS, that was a mobile phone and PND simultaneously. It is hence heartening to note that the GPS leader has taken the step forward rather than wait for the handset vendors to eat into its market and kill it.
Apart from GPS and a HSDPA modem (3G data standard), the nuviphone is advertised to have WiFi, bluetooth, video camera, digital camera and mp3 playback facilities. The details of these features are hazy at the moment. It however seems that Garmin has attempted to market its latest offering as a step beyond the iPhone.
While the phone looks GREAT on paper, I must say that it now boils down to execution. The big question is whether it can match the user experience that is the key selling point of Apple’s offerings. The levels of integration being promised are certainly a novelty. But these features can fall flat if the device is difficult to use. Besides, the OS should be capable of handling various applications that can make use of its 3.5 inch screen display and its touch screen. To be fair to Garmin, the intuitive UI of its PND products is proof that the company has the potential to live up to the hype that this announcement has created.
I am also curious to know several other details which the coming days will tell us. Does the phone have a flash drive or the likes? How many songs can we store? What is the resolution of the camera? How well is the OS integrated with the web? How about its WiFi capabilities?
I will certainly watch out for more announcements about the nuviphone and gather more details on existing Garmin’s existing products to have a better idea of what to expect from the phone. For the moment, I am quite ecstatic about Garmin’s move. It bodes well for the company and the mobile industry. If the nuviphone does live up to its billing, it already has one iPhone proponent ready to make a switch!
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