Texas Instruments, one of the larger system on chip vendors, has just said that they’re going to “shift” their focus away from the wireless market. In case you don’t know who TI is, they make chips under the OMAP brand. The Samsung Galaxy Nexus for instance, that uses an OMAP chip, as do Amazon’s new Kindle Fire tablets. So why did the company come to this decision? Greg Delagi, Senior Vice President for Embedded Processing at TI said: “We believe that opportunity is less attractive as we go forward.”
Now we know what you’re thinking, isn’t the mobile device industry booming? It is, but companies don’t want to deal with the hassle of integrating components from multiple vendors. Why do you think most Android phones on the market use Qualcomm chips? Because Qualcomm sells handset makers a complete solution. The Snapdragon platform comes with an application processor (Krait), a graphics processor (Adreno), all the radios needed for data, GPS, Bluetooth, and so on and so forth. TI will gladly sell companies companies CPUs, but companies want more than that.
Take a look at ST-Ericsson for example. STMicroelectronics, who was great at making chips, decided to partner with Ericsson, who was great at making cellular modems, to take on the big boys. Today their products are found in several of Sony’s Android devices. Will they ever become as successful as Qualcomm? Probably not, but hey, you can’t fault them for trying.
And finally, the clearest example of this type of integration, is NVIDIA. They bought a company called Icera in May 2011. Their area of expertise? Cellular modems. During the next 12 months it’s practically guaranteed that you’re going to hear about a new Tegra chip that comes with some sort of cellular connectivity. That product, whatever it’ll end up being called, is what companies want.
TI knows this all too well, which is why they’re calling it quits.