Earlier, PC chip giant Intel withdrew from the mobile phone chip market and turned its attention to the Internet of Things. However, looking at the entire chip industry, turning the target to the Internet of Things is not an example. In the context of the shrinking smartphone market in the PC market, can the Internet of Things really save the chip maker represented by Intel? What should they do to get out of trouble?
Smartphone growth slows down, and the Internet of Things has broad prospects
According to the data, global smartphone manufacturers shipped a total of 334.9 million units in the first quarter of 2016, a slight increase from the 334.3 million units in the first quarter of 2015, and the year-on-year growth rate was low. The performance of Qualcomm and MediaTek was affected. Qualcomm's latest financial report for 2016 showed that the total shipment of MSM chips in the second quarter was 189 million, a decrease of 19% from 233 million in the same period last year and a 22% decrease from the 242 million in the previous quarter. For the current third quarter, Qualcomm forecasts that chip shipments will fall 13% to 22% year-on-year to 175 million to 195 million.
Looking at MediaTek, MediaTek’s revenue for the first quarter of 2016 was NT$55.91 billion (US$1.72 billion), which is basically in line with the company’s forecast of NT$525.5 billion, although revenue growth has increased in March. It was down 9.4% from the previous quarter. Some analysts predict that MediaTek's revenue will increase by more than 10% in 2016, but the gross margin will be further reduced.
In the context of the slowdown in the global mobile phone market, Qualcomm and MediaTek, the decline in performance and more intense competition have forced mobile phone chip hegemons to find more potential markets.
In 2015, the global IoT market reached US$62.4 billion, a year-on-year increase of 29%. Market research firm IDC predicts that by 2020, the Internet of Things will become an international market worth $1.46 trillion, compared with 700 billion last year. For the important networking devices in the Internet of Things, some organizations predict that there will be 24 billion IoT devices connected to the Internet in 2020, while Cisco, Huawei and Ericsson estimate that the number of connections is between 50 billion and 100 billion, far exceeding the current 70. The number of mobile phones in more than 100 million units.
In addition to the huge market size, according to the application market, the Internet of Things can be divided into intelligent industry, intelligent agriculture, intelligent logistics, intelligent transportation, smart grid, smart medical, intelligent security, smart home, etc., and rich applications have greatly increased the attraction for chip manufacturers. .
Chip manufacturers have stuck in the Internet of Things
PC chip's overlord Intel after exiting the mobile phone chip market, Intel CEO Ke Zaiqi issued an open letter to reveal the company's growth opportunities - "cloud and data center, Internet of Things, storage and FPGA (field programmable gate array), they Connected through connectivity and strengthened through the economic effects of Moore's Law."
At present, 55% of Intel's revenue comes from its client computing business group, compared to less than 10% from the Internet of Things. As of the first quarter of 2016, Intel's IoT revenue was $651 million, accounting for 5% of its total revenue, which was $286 million more than the first quarter of 2013, or 78% in three years. How can Intel keep its IoT business growing faster than its PC-based business?
Mobile phone chip lord Qualcomm has quietly realized $1 billion in revenue on IoT chip sales last year, and its chips are used in various urban infrastructure projects, household appliances, automobiles and wearable devices. It is said that a total of 120 million smart home devices equipped with Qualcomm chips were shipped last year. In addition, 20 million cars and 20 wearable devices use Qualcomm chips, and 10% of this year's chip business revenue will come from IoT devices other than smartphones.
Last month, ARM announced that more than half of its authorized chip shipments in the first quarter of this year were aimed at the non-mobile device market. ARM CEO Simon Segars revealed that the company has been targeting the non-mobile market such as the Internet of Things for some time. He said that the chip design and development cycle is quite long, and the patent license fee charged now is the crystallization of product development five years ago, 10 years ago or even 20 years ago. ARM's competitor Intel's $16.7 billion acquisition of Altera last year is seen as a major step forward in improving its competitive position in the data center and connected equipment markets.
Samsung also announced the system-level chip ArTIk for IoT devices. Behind this chip is the software ecosystem that Samsung is building, the SmartThings IoT cloud and development kit acquired by Samsung, and a large number of partners: Arduino and Arduino IDE, Tembook software stack, Internet One analysis platform Medium One, and the Internet of Things. Wireless connection to SigFox.
Chinese chip maker Huawei demonstrated the Agile IoT system last year, including an operating system called LiteOS, which controls the basic equipment. This is Huawei's most important step toward the Internet of Things. Huawei also joined the Cloud Foundry open source community to help create an IoT application development platform.
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