Wolfe's Den: Intel Inches Into Its Next Big Market
Diversifying beyond the PC, Intel's multi-billion dollar embedded computing push envisions Atom processors in millions of appliances, Smart TVs, and other connected devices.
In truth, embedded computing long ago shed its sole link with the factory. For years, there have been processors inside televisions and appliances. The difference today is that embedded computing on the consumer front is poised for a major expansion.
That's because consumer embedded apps like TVs, washing machines, and coffee makers are doing what desktop PCs did back in the 1990s -- they're transitioning from standalone bricks into Web-connected appliances. This is pretty simple technically but also profound in terms of market impact. We're talking about millions of televisions, cars, etc., as new-found platforms in which to stick a computing device.
Enter Intel, which intends for that device to be an SoC version of its Atom processor. "We have a vision of 15-billion connected devices," said Ton Steenman, general manager of Intel's embedded and communications group. "This is one of the big growth pillars of the company."
Steenman notes that Intel's already healthy embedded business is about to explode. "Between 2002 and 2008, we grew our embedded business between 16% and 18%," he said, noting that those percentages reflect a compound annual growth rate (CAGR).
Steenman won't provide hard numbers, but he said Intel is currently doing well over $1 billion in yearly embedded revenues. "Going forward, over the next five years, we predict we will grow 25% annually," he said.
In its public messaging, Intel is most enthusiastic about Smart TV. That's the Internet-enabled television platform co-developed with Google, Sony, and Logitech. Personally, I see Smart TV as approaching the opportunity from the wrong end. Consumers are OK with televisions offering a few extras, like Netflix access and maybe YouTube. Not so much with big screens grafted atop computers.
That was essentially the problem with Logitech's Google TV, which fizzled upon its January 2011 launch at the Consumer Electronics Show. A big impediment was a user interface only those C++ embedded programmers could love. (BTW, Google TV is essentially Smart TV under the Google brand, and it's not a stretch to foresee that term replacing Intel's desired moniker.)
Even if Smart TVs don't displace 40-inch Samsungs, it shouldn't put a crimp in Intel's embedded plans. Steenman said that Intel has "4,000 design engagements" -- people considering using Atom in embedded -- right now. Speaking to the potential success of Otellini's broadening-beyond-the-PC strategy, some 60% of those look-sees are from customers who have never bought from Intel before.
Server Market SplitsvilleJust because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.
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