Intel Corporation (NASDAQ:INTC) made an announcement this month at the Mobile World Congress. In this announcement, the company delineated its wireless connectivity solutions of the next generation. These wireless connectivity solutions also contained 10 LTE Advanced cellular modem in it. This cellular modem is known as XMM 7360. Its commercialization is expected by the latter half of the year 2015.
This modem sounds pretty impressive and remarkable as far as its technological progress goes, but the vital question which needs to be addressed is that what sort of a market is present out there for this Intel Corporation (NASDAQ:INTC) Modem and what scope does this high-end modem has to succeed in this market.
An Application Processor to go with the modem
The XMM 7360 is indeed notable, yet it does have a shortcoming. Intel Corporation (NASDAQ:INTC) Broxton has been delayed and due to the lack of an Application processor to pair up with this modem; Intel Corporation (NASDAQ:INTC) will be compelled to sell of XMM 7360 to other companies which own their processors.
This is because; companies that deploy Qualcomm application processors are usually in the need of either standalone or integrated modems, the same goes for Mediatek. Therefore the only customers left for XMM 7360 are either those companies which manufacture their own application processors but lack internal modems. The second type are those which also build their application processors but do not have their modems certified to work in those regions where Intel Corporation (NASDAQ:INTC) models have both certification and access.
Therefore, keeping in mind these considerations, the only companies left which fit the bill are LG Electronics Inc. (066570), Samsung Electronics (KRX:005930) and Apple Inc. (NASDAQ:AAPL).
Will any companies make use of XMM 7360?
LG Electronics Inc. (066570) did deploy XMM 7360 in a phone that did have its application processor; yet this phone design didn’t have a high volume. There is a possibility that if LG Electronics Inc. (066570) further improves its application processor NUCLUN, making it more competitive; then there is a very strong likelihood that it would be able to make a wider use of XMM 7360.
This Intel modem was also used by Samsung Electronics (KRX:005930) in some of its phones such as Galaxy Alpha and Galaxy Note 4. It is also possible that the upcoming Samsung Galaxy S6 would also deploy certain variants of XMM 7260. Again, there are also expectations that Galaxy Note 5 would comprise of Samsung Exynos processor, in combination with XMM 7260. However, Intel Corporation (NASDAQ:INTC) wouldn’t be the only supplier, therefore the expected volume wouldn’t be huge as well.
What makes the modem interesting?
The market where Intel Corporation (NASDAQ:INTC) can make its way in has a strong requirement for integrated solutions. This market can be low-end or can be mid-ranging or can even target high-end phones not manufactured by either Apple Inc. (NASDAQ:AAPL) or Samsung Electronics (KRX:005930). However, having said this, there is this fact hovering in the air as well, that Intel Corporation (NASDAQ: INTC) would require some great customer wins. These customer wins would consequently reflect interest in standalone modems and therefore Intel’s investment in this area would be justified.
Yet, if the company fails to get attention of these potential customers; then focusing on integrated solutions alone would be a better course for Intel Corporation (NASDAQ:INTC).
