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Intel Under Threat? Qualcomm enters the PC business with Asus, HP & Lenovo

It’s been anticipated for years, but today at Computex, Qualcomm announced the launch of what can be called a world war in the semiconductor business.

The smartphone chipmaker said three PC manufacturers — Lenovo, HP and Asus — will start making computers with its chips inside them.

The move should be particularly bitter for Intel, which powers nearly all the PCs at present, as it comes a year after the chipzilla accepted defeat in its endeavours to attack Qualcomm in its home market and put Intel chips inside mobile devices.

In May last year, Intel said it was abandoning its plans to tailor its low-power Atom processors for the mobile and tablet market after having poured billions of dollars into the endeavour.

The move was aimed at addressing exactly the kind of development that Qualcomm announced today. Intel’s Atom-based strategy was supposed to conquer the mobile market by reducing the power consumption of PC-oriented chips, before mobile players had a chance to attack the PC market by increasing the performance of mobile chips.

With today’s announcement, it is clear that the battle has been won by the mobile players for now.

“Today’s consumers experience mobility in nearly every aspect of their lives and they’ve come to expect more from their PCs than legacy computing models are able to provide,” said Cristiano Amon, executive vice president, Qualcomm Technologies.

“With compatibility for the Windows 10 ecosystem, the Snapdragon Mobile PC Platform will enable Windows 10 hardware makers to devleop next-generation modern device form factors and deliver unparalleled anything, anywhere creation experiences with up to Gigabit Class LTE connectivity.”

New Snapdragon-based PCs are likely to garner some interest in the market, especially in use cases where battery life is going to be of very high importance.

The chipset delivers a performance that is almost equivalent to comparable chipsets from Intel, while staying within the 2.0-2.5 watt power envelope.

In comparison, Intel’s offerings in this market consume between 3.8 to 7 watts.

However, the extra 2-4 watts of power that the Snapdragon 835 saves will not make as drastic a difference as may be suggested by the raw numbers. This is because, on modern laptops, the chipset is not the biggest consumer of power.

Out of the 15-20 watts of power that a laptop consumes when under active use, the chipset accounts for only 4-7 watts.

Replacing the Intel Y series chip with a Qualcomm Snapdragon 835 will reduce the power consumption by about 2-4 watts, or about 10-20%, prolonging the battery life to about 7 hours from about 6 hours.

While that will indeed be welcomed by most users, the shift to an ARM-based processor like Snapdragon will also entail certain changes that they are less likely to welcome.

For example, some enterprise software, and nearly all custom-built software that run on PCs today will not run on an ARM-based machine.

Besides, there will be a ‘slowing down’ experience in some cases, especially for applications that are highly cpu-intensive and do not lend themselves to multi-threading — breaking up a job into several parallel processes to speed up the overall task.

This is because of the power difference between ARM chips and Intel chips.

The cheapest Intel Y series processor, the 7Y30, scores about 3400 points in single core benchmark using Geekbench 4 software, while the Snapdragon 835 scores only 2050 points.

Similarly, with its two cores, the Y30 scores about 6400 points in multi-core mode on the benchmarking software, while the Snapdragon 835 scores only around 6,700 points with all its eight cores pulling together.

However, there is one area where Snapdragon and others from the ARM family will easily kick Intel chipsets out of the water — connected standby power consumption.

Due to their long history in optimizing power consumption when mobile devices go on standby, ARM manufacturers have a distinct advantage in ensuring very low power usage even when a device goes on a ‘connected’ standby.

Besides all this, ARM chip manufacturers will also be deploying a new core design, Cortex A75, that will increase the performance by another “22%” starting early next year.

WHAT WILL INTEL DO?

This raises the question of how Intel is going to react to the threat to its lucrative and mainstay business and what the impact on Intel’s business is going to be.

The first impact will be on the prices of Intel chips — especially the Y Series.

These currently start at about $280 (Rs 18,000), while high-end chipsets from Snapdragon are reported to be priced in the range of about $150-$200, including LTE connectivity. This means that Intel will have to reduce the price of its Y-Series chipsets to bring them in line with what Qualcomm is offering.

However, in this respect, Qualcomm will not be the biggest worry that Intel will have to face. Qualcomm, after all, is considered premium in terms of its brand positioning.

The real pricing threat will come from players like MediaTek, whose 10-core Helio X30 will debut in the next few days.

If Qualcomm’s pricing is in the $150-200 range, MediaTek’s pricing has traditionally been in the $100 range — a third of Intel’s ‘list price’ for the Y730.

Intel will be forced to offer deep discounts to equipment manufacturers to remain in competition. To be fair, Intel already does offer such cuts.

Nevertheless, the chipzilla’s margins from its mobile chip business have only one way to go.

The second challenge for Intel will be to take the fight to enemy territory.

To do this, Intel will have to further reduce the power consumption of its Y Series chips — currently at 3.8 watt — to the 2.5 watt range for smartphones and 2.5-3.0 watt range for tablets.

This is likely to be achieved in the new Cofee Lake architecture due out in the second of 2017, which is reportedly able to provide 25% more power compared to the current Kaby Lake series.

More likely, the 10-nm Cannon Lake series, due to out in the first half of 2018, will be the one that finally enables Intel to address both the smarphone and the tablet markets. The chipset should be able to provide comparable performance to current Kaby Lake chips while consuming 50% less power. In other words, the 9Y30 chipset should hum along comfortable within a 2 watt thermal envelope, compared to 3.8 watts for the 7Y30 (7th generation Y-30).

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