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вівторок, 12 квітня 2011 р.

Intel Sets up MeeGo Research Center With China's Tencent

Intel is establishing a joint innovation center with Tencent, one of China's largest Internet firms, to develop products and services around the chip maker's MeeGo mobile operating system and devices using its Atom processors.

The new partnership could help Intel to promote MeeGo in China, along with its Atom-based microprocessors, both of which have yet to be widely adopted.

Intel had high hopes for MeeGo, a mobile version of Linux that is designed for a wide range of devices like smartphones, tablets, netbooks, along with smart TVs and mobile computing in cars. The OS launched last May, but Intel was dealt a blow when Nokia, its major partner on MeeGo, chose to establish its future smartphone strategy around Microsoft's Windows Phone OS.

Tencent and Intel made their announcement on Tuesday at the Intel Developer Forum in Beijing. The innovation center results from Intel teaming up with Tencent last year to work on MeeGo.

"We are very happy with the progress we have made," said Renee James, Intel's general manager for its software and services group. "It's from this desire working with Tencent we are forming the center around MeeGo and Atom-based devices."

Intel's Atom chips are designed for mobile devices like tablets and netbooks. But the chips have yet to provide the same low power efficiency as ARM microprocessors, which are more widely used in mobile phones and tablets. Intel hopes to eventually design better Atom chips in the coming years through upgraded manufacturing methods.

Tencent operates China's largest instant-messenger service, QQ, which has 647.6 million active accounts, and is a major provider of online gaming. The company sees opportunities in tablets, smart TV and mobile computing in cars, said Jeff Xiong, Tencent's co-chief technology officer.

The innovation center is already working to develop product and services in the fields of tablets, security and gaming. Currently the center has 60 engineers, but will eventually have a total of 200.
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Can AMD's Android Plans Hurt Intel's Atom Chips?

Advanced Micro Devices (AMD) is hiring Android driver development engineers, a move that reflects the chipmaker's big push in to the tablet and smartphone space with the help of Android.

The market for tablets and smartphones is huge and lucrative. Market research firm Gartner expects tablet sales to touch 294 million in 2015 from almost 70 million this year. Meanwhile, In-Stat is forecasts 850 million smartphone sales in 2015.

AMD is recruiting talent for the development of Android driver software indicating the chipset vendor is also likely to offer notebook/tablet PC partners chipset solutions supporting the Android platform later, Digitimes reported citing sources.

A job post at AMD website reads: "The Linux Base Graphics team is looking for Android Driver Development engineers to help us evolve our driver stack for new platforms and in line with the development trends in the Android ecosystem. Experience with video decodes acceleration within the Android web browser or video player application would be an asset."

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The requirement specification suggests that AMD have begun the process to make its chips compatible with Android, which is one of the leading mobile operating systems and challenging Apple's iOS.

Google's Android is experiencing exponential growth and manufacturers shipped 33.3 million Android phones worldwide, according to the data from the UK-based market research firm Canalys.

Meanwhile, a new data from ComScore puts Google Android on the top of the list for the smartphone market category, followed by RIM and Apple in the second and the third positions respectively.

The data from comScore MobiLens service, documenting key trends in the U.S. mobile phone industry during the three month average period ending February 2011, showed Google Android grew 7.0 percentage points since November, strengthening its number 1 position with 33.0 percent market share.

In addition, Google has built an entire ecosystem around its Android software in terms of services, apps and developer support. In fact, the number of applications on Android Market currently stands at over 200,000 up from only 75,000 in June 2010.

So, no wonder why AMD wants to take advantage of Android and its exponential growth.

Intel Impact

Meanwhile, AMD's foray in to the tablet/smartphone space may hurt Intel's plans for Atom processors.

Both Intel and AMD didn't have many products to offer in the mobile computing market as their core market had been PCs, which is still growing at a healthy pace but not at the same rate as tablets/smartphones.

Intel, which has already been supporting Android, developed Atom processors for the market, while AMD until now has been mostly reserved about the platform without much products in its kitty.

But, AMD's Fusion-based processors, which consume low power while delivering decent graphics, may be the trump card for the chip maker to enter into this market.

AMD is hiring staff especially for creating Android drivers for its Fusion line of chips as it wants to diversify in to the ever-growing tablet and smartphone market. AMD's is a multi-core microprocessor architecture that combines processing and graphic cores into a single processor package.

AMD's Brazos chips, a product from Fusion platform, seem to be doing better than Atom in terms of graphics performance as well as heating, according to AnandTech.

In addition, since the Brazos chip seems to be smaller than Atom, it will give significant price advantage for AMD.

On the other hand, Intel is already struggling to compete with British chip giant ARM, which designs that power the vast majority of tablets and smartphones in the market today. To counter that, Intel launched Oak Trail Atom chips.

Media reports say that Google's Android 3.0 Honeycomb will make its way to tablets powered by Intel's upcoming Oak Trail processing platform.

Oak Trail is the code name for the Intel Atom processors that have been developed to compete with ARM's mobile processors, which have more or less dominating the market as they provide a lower power consumption and longer battery life than Intel.

Intel hopes that that Oak Trail will provide better performance and battery life compared to ARM based processors.

However, both AMD and Intel are not alone in the market. They will face stiff competition from ARM-based chip makers including Nvidia, Qualcomm, Texas Instruments and Samsung. Leading ARM-based mobile computing chips include Nvidia's Tegra 2, Qualcomm's snapdragon, Texas Instruments' OMAP and Samsung's Hummingbird.

Stock analysis firm Trefis expects Atom constitutes about 2.8 percent to estimated $155 billion value for Intel. This puts Atom's value at around $4.3 billion.

"If AMD can create even half of this value for itself from some success in the mobile computing market (netbooks, smartphones, tablets etc.), it could lead to an upside of as much as 30 percent to its current price estimate," Trefis said.

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HTC Adds Dual-core Sensation Smartphone to Its Lineup

HTC's latest smartphone, the Sensation, has a dual-core 1.2GHz processor from Qualcomm that holds the promise of faster graphics and is due to ship in Europe in the second quarter, the company said at an event in London on Tuesday.

That HTC didn't have a dual-core processor at Mobile World Congress in February came as disappointment to some, and Qualcomm was to blame, according to Geoff Blaber , analyst at CCS Insight. HTC is closely aligned with the chip maker, and until the conference, Qualcomm was a little behind Nvidia and its Tegra 2 processor, he said.

But with the launch of the Sensation and the recent EVO 3D smartphone, both HTC and Qualcomm show that they are back on track. The smartphones join dual-core models such as the already shipping LG Optimus 2X as well as the upcoming Motorola Droid Bionic and Samsung Galaxy S II.

Dual-core processors have now become a must in high-end smartphones, and result in, for example, better graphics, according to Carolina Milanesi, research vice president at Gartner. The processor also makes Web browsing fast, according to a data sheet on Vodafone UK's website.

However, HTC for the moment does not appear to be involved in the race to make smartphones as thin as possible. The Sensation is 11.3 millimeters thick, compared to the Samsung Galaxy S II, which is 8.5 millimeters thick.

HTC has also decided to stick with HSDPA (High-Speed Download Packet Access) 14.4M bps (bits per second) technology, rather than 21.1M bps HSDPA, which is available on some high-end smartphones.

Just like its other Android-based smartphone, the Sensation uses the Sense to differentiate the user interface from the competition. The version on the Sensation will, for example, allow users to launch applications from the unlock screen, reminiscent of Nokia's Bubbles application.

To entice consumers, phone makers are putting more effort into content services. The Sensation will ship with Watch, a service that will allow users to rent or buy movies or TV series on their smartphone.

In addition to a dual-core processor, the Android 2.3-based Sensation has a 4.3-inch touchscreen with a resolution of 960 x 540 pixels. The back camera has an 8-megapixel resolution and LED flash and there is a VGA camera on the front for video calling and conferencing. The camera can also be used to record videos at 1080p at 30 frames per second.

The phone will cost about 4,700 Swedish kronor (US$750) before taxes and subsidies, according to an HTC spokeswoman.

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Why Apple investors shouldn't sweat Android

FORTUNE -- It seems that almost every day I'm confronted with yet another insignificant article explaining how Google has surpassed Apple in "platform market share" and that, due to this cataclysmic state of affairs, investors should jump ship as this surely amounts to nothing short of the financial end of Apple.
iphone android wars

Who's winning?

Just recently, Business Insider's Henry Blodget published a piece on this highly immaterial subject which generated tremendous criticism from investors, readers and even other members of the press. In his article, breathlessly entitled "Android is Destroying Everyone, Especially RIM – iPhone Dead in Water", Blodget writes that Apple investors should be "scared to death" by Android's recent 7-point gain in U.S. market share over the past three months. According to comScore, Android OS holds 33% of the U.S. market while RIM OS holds 29% and Apple iOS only 25%.

Blodget argues that Android market share gains are very important "because technology platform markets tend to standardize around a single dominant platform. And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward of building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them." While Blodget does lay out the main concern in any platform war, his evidence for why Google (GOOG) is starting to dominate is not only insubstantial, it's actually irrelevant.

After hundreds of comments posted to his article, many of them critical, Blodget then published a second story attacking the Apple (AAPL) investment community at large for criticizing his article. In Blodget's defense, some Apple investors do consistently publish highly inappropriate and emotionally charged comments if they feel an article takes a bearish stance against the company -- even when the article is justified. But dismissing Apple investors, many of them obviously intelligent enough to make nearly 500% gains in the company since the lows of the financial crisis, as though they're zealots going insane, is equally inappropriate.

Financial journalists often miss the larger picture or fail miserably at raising any actual or material concerns for Apple. This platform market share issue is no different. It is a perfect example of how a journalist can rely on one set of misleading data in order to distort the reality regarding the overall smartphone industry. Let's get back to reality -- the reality that platform market share asks all of the wrong questions.

First of all, because Google doesn't actually make any hardware it becomes very difficult to tell exactly where these gains are coming from. Are the gains being derived from actual growth and conversion rates or are these gains simply coming from Google offering up its platform to more smartphone makers? The latter tells us nothing while the former is very revealing. For example, suppose Research in Motion (RIMM) decided it wanted to offer the Android operating system on all of its phones starting on December 31, 2010.

Even if Blackberry sales declined in 2011 for the first time ever, Android growth would skyrocket because every single Blackberry device sold would carry the Android operating system. Suppose the reason for the drop in Blackberry sales is later attributed to the fact that customers disliked the Android operating system and decided to go elsewhere. This reality isn't reflected in the type of data released by comScore.

Comparing apples to apples

Thus, the more relevant and pressing question is whether a smartphone maker's year-over-year unit sales growth outperformed or underperformed the industry. For example, if 100 million devices are sold in the global smartphone market in 2010 and 150 million are sold in 2011, any vendor that grew less than 50% is actually losing market share while those vendors that grew more than 50% are gaining market share. It makes sense. The whole market grew by 50% and if Company A added less than 50% more customers it means it lost those customers to someone else.

Interestingly enough, iPhone sales continue to far outpace the growth in the global smartphone market. In the December quarter, for example, while the global smartphone market grew at a pace of 70% year-over-year, Apple's iPhone grew by 87%. This point right here should end all discussion. But apparently it doesn't, as we find more and more of these articles every day.

Secondly, if anyone ought to worry about a platform becoming singularly dominant it should be Google. Apple has its iOS seeded in not only one, but three separate markets that it dominates -- the iPhone, the iPad and the iPod Touch. Even more importantly, the next version of Apple's Mac OS (Lion) is going to assume many key elements of the iOS operating system, which will likely result in higher conversion rates to the overall Apple ecosystem.

If we're going to discuss platforms in isolation of unit sales it seems a little disingenuous to intentionally exclude sales of the iPad and iPod Touch. After all, platform market share is supposedly of the utmost importance because developers are purportedly going to rush straight to whichever platform is more ubiquitous. ComScore doesn't include sales of either device when looking at the platform, which makes the overall data meaningless and unreliable.

Finally, here is why this issue of platform market share is trivial and financially irrelevant to the overall Apple investment thesis, and does nothing more than to distract people from financial reality. In the end, Apple makes so much of the money in the smartphone industry because it actually understands how to run a business. Apple's iPhone is far outpacing the growth in the global smartphone industry according to IDC and Gartner.

The iPhone is growing at a pace of 85-100% each quarter. iPhone revenue is nearly doubling each quarter. After selling 39 million iPhones in 2010, Apple is going to sell more than 75 million in 2011, generating nearly $50 billion in revenue from a single device.

Google will probably report about $6.5 billion in total revenue when it releases its first quarter results later this week. Apple's iPhone alone will very likely eclipse $11 billion for the March quarter. For 2011, Google is expected to report about $27 billion on the top line compared to the iPhone's expected $48.2 billion in revenue. The iPhone as a business is nearly twice the size of Google's entire operation. This is a financial reality rarely illuminated in these so-called "platform market share" articles where Apple investors are supposed to be "deathly afraid" of the Android operating system that doesn't even create a fraction of the revenue Apple generates from the iPhone.

If the two charts below aren't enough to show why Apple investors shouldn't really lose much sleep over Android, RIM or any other company, perhaps the color green will. As of the close on Friday, Apple is trading at only 18.69 times last year's earnings before backing out its nearly $60 billion in cash. Apple reported $15.15 in EPS on $65.2 billion in revenue in 2010. For the 2011 fiscal year I'm expecting Apple to report $27.30 in EPS on $111.6 billion in revenue. This represents a 71.2% top line growth expectation and an 80.1% growth rate on the bottom line. Apple will end the year with nearly $75-$80 billion in cash or about $87.00 in cash per share.

There's a lot of bearishness going around in Apple these days. Is the iPhone 5 delayed? Is it not delayed? Is Apple able to make enough iPads? Can it still grow? Is the Android supplanting Apple's dominance? What happens when the NASDAQ-100 rebalances in May?

All of these issues are extraordinarily minor in the grand scheme of things. Here's a clear dose of reality -- Apple shares will see $500 before we close out the year. This platform market share issue is trivial from a financial perspective. Once Apple lags the growth of the global smartphone market in unit sales, then investors can start to worry. Until that time, enjoy the ride straight to $500.
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