Market for mobile chips disappearing. When Henry Samueli shut down Broadcom's cellular baseband business, I happened to be visiting one of the founders. Many of the 3,000 engineers affected were his friends and the pain was apparent. However, I could see why the decision was necessary. Apple and Samsung dominate the mobile phone business and each made their own chips. Those two companies had growing market share and there just wasn't enough merchant business to sustain the chip vendors. Qualcomm's scale gives them a major advantage and the very efficient Mediatek has also grown.
Huawei, #3 or #4 in cell phone sales, is taking a similar path. Top analyst Linley Gwennap (quote in the headline) is enthusiastic about the new Huawei chip. He believes, "The new chip will outperform both the Snapdragon 810 and the Exynos 7420 on most mobile benchmarks, setting a new bar for smartphone performance."
Huawei HiSilicon is the first to market with the new Cortex-A72, The Snapdragon 810 and the Exynos 7420 "rely on the older Cortex-A57. The Kirin 950 is in production and will first appear in Huawei's Mate 8 smartphone, due to ship in December." The 950 is a 16nm FinFET produced by TSMC.
Two decades of mergers leave very few survivors across the telecom space. The resulting market power is devastating to suppliers. The decline of AFC, Nortel, Tellabs and many others was accelerated because the three surviving Bells were virtually the entire market. Lucent had the same issue. Cable suppliers tell a similar story and are much fewer than before. Startups find it almost impossible to raise funds because VC's know the problem. Europe is only slightly different.
Silicon Valley died over the last decade and nobody noticed. Dozens of telecom startups each year have declined to a handful. (Try naming some.) The larger companies are also fewer. Software firms - Google, Facebook, Apple - have seen enormous growth, providing enough jobs that the economy is strong around San Jose. Linley emails, "Some people think we should change the name to Innovation Valley." "Silicon" no longer belongs in the description.
Mike Moritz writes (FT) "Several of today’s most valuable technology companies did not even exist in 2000. ... Beyond some of the customised systems they operate in their own datacentres, and in Google’s case, some sideline activities such as its Nexus phones and Chrome notebooks, none of these companies sully their hands with anything as taxing as hardware. They have thrived from the artful deployment of software, in particular the “cloud based” variant, and — for Facebook, LinkedIn, Twitter (and Google’s YouTube service) — organising and collating the contributions of their users."
The Chinese government has allocated $47B to building the domestic chip industry.
Linley's Processor Watch newsletter is a must read and it's free.
By coincidence, I have just filled out a questionnaire for Huawei. I thought to include my answers here so I can conveniently point other pr people to my preferences. I'm sure Huawei will be happy about my comment, "among the top 3 companies worldwide advancing wireless technology," but less so about my request for more substantive information.
Q1. Besides financial performance and business strategy, what other topics would you be interested in learning about? (Please note all that apply).
F. Research and development
Q2. Which of the following Huawei services are you interested in learning more about? (Please note all that apply).
D. Consumer tech products
Q3. Would you be willing to travel to China to learn more about Huawei?
yesIf yes, how much notice would you require for such a trip?
Would it be helpful for Huawei to organize meetings for you with other Chinese companies during your time abroad?
Q4. Do you have any impressions of Huawei executives?
Hardworking, competent, trained not to talk much
Q5. In your opinion, which companies in the technology sector (specifically the ICT space) provide the best media relations?
Can you list several qualities of superior media relations?
Accurate and well-informed
Q6. Do you think Huawei generates too much or too little information to media?
Far too little information of substance.
Q7. Would you be interested in content different formats other than press releases? (For instance, infographics, photography, social releases, video, factsheets, etc.)
Like most working on the web, I try to have a good picture for every article. Unfortunately, too many corporate pictures are stiff executives or head and shoulders. Factsheets are also welcome.
Q8. What is your general impression of Huawei?