Perfect timing for Samsung to release the Galaxy S5
In the last article in this series, we argued that the features of the new Galaxy S5 are far from revolutionary. Here, we’ll discuss whether Samsung could challenge Apple (AAPL) in the U.S. smartphone market despite the lack of innovative features in the Galaxy S5.
We believe that although the Galaxy S5 lacks compelling new features, the timing of the S5 smartphone release is perfect. The Galaxy S5 is slated for release in April this year, which means it will give Samsung S3 users the perfect opportunity to upgrade. The Galaxy S3 was released in May 2012, and by May 2014, S3 users’ two-year contracts would be about to expire. Samsung has good relations with U.S. major telecom providers such as Verizon (VZ), AT&T (T), and Sprint (S), which facilitates the sale of Samsung’s smartphones. So we believe existing Galaxy S3 users shouldn’t have any issue upgrading to the Galaxy S5.
Apple is unlikely to challenge Samsung before September this year
Plus, Apple already launched the iPhone 5S and iPhone 5C in September last year, and it’s unlikely to launch the iPhone 6 before September this year. So Samsung won’t have any major competitor for the next six months, during which time it could gain a lot of ground. According to Comscore, Samsung increased its share in the U.S. smartphone market from 25.4% on average in the three months ending October 2013 to 26.7% on average in the three months ending January 2014. Although Samsung is a distant second compared to Apple’s share of 41.6%, we’ve seen that things change pretty fast in the smartphone market. So it will be interesting to see how many gains Samsung can make in the smartphone market and how much Apple can lose.
In the demo above, they simply showed the performance differences between exactly idential smartphones but with different Wi-Fi chips, with one featuring the old technology and the other featuring the new 2x2 BCM4354 combo chip. They used a commercially available Netgear 802.11ac consumer router to test the speed differences and with the stock consumer Samsung Galaxy S4, they were able to get a max of 162 Mbps while with the same phone modded to use the BCM4354 they were able to get a max of 354 Mbps, more than double the previous generation.
So, as you can tell, Broadcom had a lot to show at Mobile World Congress, some new, some not, but what it definitely helped illustrate is that Broadcom is much more in the game than they have been in the past. And that they will be an interesting company to follow as the year progresses forward. Especially on the Wi-Fi and NFC fronts. It will also be interesting to see when they can ship a Cat6 LTE modem and get a carrier to approve it a well.
Following that, we checked out Broadcom's Cat6 LTE demonstration, which is basically a result of their absorption of Renesas electronics' mobile division. This demonstration was designed to create a full Cat6 network scenario to demonstrate that they have Cat6 LTE working and are expecting to have their 300 Mbps carrier aggregation ready this year. Their 40 MHz carrier aggregation is through LTE FDD and TDD and is a 300 Mbps down and 50 Mbps up throughput solution that supports envelope tracking and VoLTE. In addition to LTE, their Cat6 chip will support 3G's full breadth of DC-HSPA+ at 42 Mbps as well as TD-SCDMA and will support dual SIM and dual active SIM. Another interesting feature that their new Cat6 LTE modems will have is seamless Wi-Fi handoff to Broadcom's 5G WiFi 802.11ac combo chips. This would be utilized by carriers that have Wi-Fi calling features like Sprint or T-Mobile and would be a great thing to have for users that have fairly poor coverage at home, but don't want to drop their calls or data connection.
Speaking of Wi-Fi, Broadcom has been a leader in high-performance WiFi with their 802.11ac WiFi chips powering many of the flagship devices of last year like the HTC One and Galaxy S4. And now, this year, they plan to improve upon that with their new '5G WiFi' 2x2 MIMO combo chip for smartphones. The BCM4354 is designed to significantly improve the signal and data throughput of smartphone 802.11ac connectivity as well as reduce power consumption by what they claim to be 25%. What's even more interesting is that this combo chip brings not only 2x2 5G Wi-Fi (802.11ac) but it also delivers Bluetooth 4.1/Bluetooth LE, an FM receiver AND Rezence wireless charging support. For those unfamiliar with Rezence, we actually just did an article about it yesterday detailing all of the amazing benefits of magnetic resonance charging, which is the technical name for Rezence wireless charging.
It actually comes in both low-power PCIe and SDIO 3.0 interfaces, which makes it very flexible for OEMs to implement. And much like the previous generation it does have transmit beamforming, TurboQAM, LDPC codes and high accuracy indoor location.
At Mobile World Congress 2014, last week in Barcelona, we had an opportunity to meet with the people at Broadcom to get an update of where the company is in terms of wireless technology. Especially when you consider that Broadcom has been a bit behind in terms of cellular technology.
The first thing we saw was their new NFC receiver, which is actually a huge improvement over the previous generation for a multitude of reasons.
Broadcom's new BCM20795 has a multitude of improvements over the previous generation of NFC receivers, especially when you look at the image above. The image above illustrates exactly how much smaller the new generation is compared to the previous generation. Because of this optimized footprint, the board are itself is 35% smaller and also results in 30% fewer external components that need to complement the NFC receiver. It ultimately results in a 35% cost savings for OEMs and has significantly lower power consumption. Broadcom claims that it has the industry's lowest power consumption, with a 60% savings in mobile device applications. So, not only is this new receiver more power efficient, but its also significantly smaller which improves the applications where it can be used.
Below, we have a demonstration of the new NFC receiver which is commonly used for payment methods, sharing data, and pairing devices. I personally have used Broadcom's older generation NFC receiver in my Nexus 5 to pay for things using NFC and it simply works. But now, with this new receiver, many much smaller devices will be able to use NFC as well, including wearables, making the experience much better.
Eric Brandt - Chief Financial Officer
Yes, and I would say look we understand that and I think that’s why I said I think it’s an important year to prove that we can deliver on the mobile strategy. In terms of spinning out broadband or infrastructure or those sorts of things, it’s hard to say that they create a whole lot of value. I don’t really know. I do think that there is lot of shared technology and a lot of the secret sauce exists in central engineering. I mean a lot of that sort of is partition between wired and wireless and there is analog that everybody uses. But I don’t know, we are not -- certainly not opposed to something that creates value for our shareholders.
Joe Moore - Morgan Stanley
And the push we get on the some of the parts is that mobile and wireless will -- could lose money I mean and you are trending -- operating margins are trending low single digits now.
In terms of how we feel about the stock price and the issuance of equity, we are very focused on it. I think we’ve probably designed a compensation system more towards the momentum based industry and probably not as much around sort of capital return and TSR. And we will add TSR this year to our performance metrics and the way we measure ourselves as a management team.
The chip battle for both baseband processors and application processors (APU) was intriguing. Bob Rango, executive vice president of mobile and wireless with Broadcom (BRCM) was kind enough to spend a few minutes chatting with me at the company’s booth. He was getting ready to head up to Finland to rally the troops at the company’s baseband processor operations, which it acquired from Japanese firm Renesas Electronics in October. Remember that this operation used to be the internal baseband business of Nokia (NOK), which at one time, as Rango points out, powered half the phones in the world, at Nokia’s peak.
“Carriers all know this baseband, it’s already been qualified,” he said, speaking to the advantages of the business. Plus, “Compare our Cat4 versus competitors is 25% lower power and and 25% smaller die size,” he points out, referring to the current generation of LTE baseband in carrier networks.
On display in the booth, a less-expensive version of Samsung Electronics‘s (005930KS) Galaxy S4 with that baseband, the “M320″ integrated APU-baseband. It’s as good as the year-ago S4, but cheaper and with more compact electronics. Just fine, because the S4 is now yesterday’s news, with the debut of the S5 on Monday, which arrives around the world on April 11th.
Broadcom also was showing off a reference model, really a mock-up of its chips on a circuit board, that vendors and developers can use to prepare for the company’s forthcoming “category 6″ baseband chip. It looked rather cool, and as a working phone, it would be fun to imagine carrying the gigantic device around town as some sort retro phone thing. The phone kit was running through a Nokia-Siemens Networks Cat6 LTE base station, which is a sizable and also fun-looking bit of gear.
we’ll show you how it’s done, and make it a bit more platform-agnostic to the benefit of everyone.
See, during AMD’s initial promotional outreach for Mantle, the phrase “close to the metal” was bandied about liberally. (This was used to express developer desire to extract more performance from the GPU, and talk to it more directly.) Everything about Microsoft’s description for this GDC session seems to be calling out AMD and sounding a battle cry.
To be clear, Mantle is in its infancy. While AMD does have the staunch support of developers like DICE, Eidos-Montréal, and Oxide Games, they’ll need to elevate Mantle’s visibility and show the world even more developer support. Especially since Microsoft seems driven to appeal to game developers across Xbox One, PC, tablets, and smartphones with what I have to assume is the imminent reveal of DirectX 12.
Last year AMD debuted a new application programming interface (API) called Mantle alongside their new Hawaii GPU architecture. Primarily designed to run on discrete Radeon graphics cards and their new Kaveri APUs, Mantle was designed to give game developers a means to work more closely with the GPU, freeing up some of the CPU’s workload and generally extracting more performance from a Radeon graphics card than was typically possible with Microsoft's MSFT -0.19% popular DirectX.
Shortly after Mantle was announced, Microsoft appeared to have its collective feathers ruffled. On the Windows App Builder blog, Microsoft adopted a defensive posture, pointing out that the Xbox One would not utilize Mantle since the new console had its own low-level API called Direct3D 11.X. When AMD evangelized Mantle early on, they would use words like “cross-platform” and explained how the API would simplify porting next-generation console games to PC.
Perhaps there’s a rivalry playing out behind closed doors, and perhaps not. What we now know for certain thanks to The Tech Report is that Microsoft has a March 20th session at the upcoming Game Developers Conference (GDC) called “DirectX: Evolving Microsoft’s Graphics Platform.” And the session description raised my eyebrows.
“For nearly 20 years, DirectX has been the platform used by game developers to create the fastest, most visually impressive games on the planet.”
Interpretation: We’re the established API. Developers are comfortable with us. There’s no room for newcomers.
The description of the GDC session continues with a very perceptible nod to AMD:
“However, you asked us to do more. You asked us to bring you even closer to the metal and to do so on an unparalleled assortment of hardware. You also asked us for better tools so that you can squeeze every last drop of performance out of your PC, tablet, phone and console. Come learn our plans to deliver.”
Interpretation: You took a strong first step, AMD, but we’ll show y
Speaking of chips, Bernstein Research's Stacy Rasgon today reiterates an Outperform rating on shares of Broadcom, and a $33 price target while expressing disappointment and frustration with the company's continued practice of making large stock awards to executives. Writes Rasgon, “Yesterday Broadcom issued Form 4's for the senior executives, detailing their annual February RSU grants. These recentRSU grants are up 26% YoY on a unit basis, and up 12% on a dollar basis, vs. the Feb 2013 issuance while BRCM's stock underperformed the S&P 500 by more than 4000 bps in 2013, one of the worst years for shareholders in the company's history.”
“Frankly, we find this frustrating. While we believe the company may in fact be on the verge of a turnaround, it is still early, and we would prefer to see management rewarded for achieving the actual results, rather than in advance.”
Pacific Crest expects the pricing trends of Broadcom's 2x2 MIMO 802.11AC and 4G baseband products to stabilize. The firm expects Mobile World Congress and the upcoming launch of Samsung's (SSNLF) flagship Galaxy S5 smartphone to act as catalysts for the stock. It keeps a Sector Perform rating on the stock.
Broadcom is gathering strength and contracts, especially in emerging markets: a lot of Samsung mid-range phones are powered by Broadcom which predicts that the trend will continue in 2014. In the west, the question is whether or not Broadcom will end up competing on the very high-end SoC business with Qualcomm. It’s not a priority at the moment, and Broadcom does not yet have the graphics and CPU performance to do so, but if Broadcom is successful in its mid-range business, that would be the logical next step.
It twill be interesting to see how Intel and NVIDIA will manage their LTE business in 2014 and beyond. Intel has a very compelling story with its Infineon subsidiary releasing LTE products, and NVIDIA has a programmable modem that looks great on paper, but is yet unproven in worldwide markets.
To achieve the feat of launching worldwide within the span of a few weeks means that whatever modem is used in the handsets has to be tested and qualified by the carriers and the wireless regulatory bodies of each market. Short of that, the only thing that is harder is to have a stable product in the streets. At the moment Broadcom says that its LTE products are qualified in 20 countries and 40 carriers, and they expect this to grow further and faster during 2014. Since it has had success with its 3G lineup (see above), Broadcom hopes to do the same, and more, with its LTE products.
When I asked Scott McGregor if he thought that Broadcom could support a partner launching a handset in 80 countries by the end of 2014, he answered “no problem”, and added that his company already secured the qualification with the two most demanding carriers in the world: AT&T and NTT DoCoMo.
It’s interesting to see how Broadcom thinks about the “high-end market” in terms of modem while end-users may think about CPU & graphics speed. However, Broadcom also looks at this from a “wireless efficiency” point of view: Carriers are very eager to switch to faster LTE networks because those are much more radio-band efficient. This means that using the same spectrum they already own, carriers can serve more customers at higher speeds. This opens an opportunity for Broadcom to compete mostly based on two things: 1/ modem performance 2/ platform ease of integration.
Make it easy for customers to deploy
Broadcom has been very busy building reference phone designs that partners can use to get to market very quickly, and there’s nothing like solving someone else’s problems to make money. This is a good way to make quick inroads into the volume smartphone business which is operated by companies that want a great platform that can be used virtually “as is” without having to invest heavily in hardware and software engineering.
Broadcom has recently demonstrated that its smartphone modem can communicate with a “live” 300 Mbps LTE commercial network. Although demonstrations using a similar technology have been done in the past, Broadcom says that it is the first to do so on a “live” network (in Finland) which means that a cell tower used to serve actual wireless customers was upgraded and used for the demonstration. The test device itself was only yards away from the tower to achieve the best speeds, but this is not unusual for that kind of demonstration.
I recently met with Scott McGregor (Broadcom’s CEO) and for him, this milestone shows that Broadcom has basically caught up to Qualcomm over the past two years since both companies have now announced their Cat6 LTE support within a week from one another. At this point in time, these are the only two companies that I know of that have reached this stage of LTE support.
The modem is the key element in the phone processor business
Broadcom knows that having a great and easy to integrate LTE solution is key to success. In fact, it is why Qualcomm is enjoying continued success at the moment, and there’s no way around it: no matter what one’s CPU or graphics performance is, the modem will drive that business – at least for the time being.
When a device manufacturer launches a new handset, being able to hit as many countries/markets/carriers as possible within the shortest possible amount of time is critical.Failure to do so means that the marketing efforts will be diluted and a late arrival means that a competitor will show up with better hardware and take customers away. Given that we are on a yearly upgrade cycle, with new handsets arriving every quarter (if not every month) the clock is ticking.
To wins big contracts, modems need to be qualified worldwide
To achieve the feat of launching worldwide within the span of a few weeks means that whatever modem is used in the handsets has to be tested and qualified by the carriers and the wirel
Russian service provider NTV-Plus is delivering live satellite coverage of the opening ceremony of the 2014 Winter Olympics using technology supplied by Broadcom and Elemental Technologies.
Following an extensive period of testing throughout 2013, Broadcom, Elemental and NTV-Plus designed and deployed an end-to-end 4K HEVC workflow using Broadcom-enabled real-time decoders (the BCM7445 UHD system on a chip), Elemental Live video encoders, NTV-Plus satellite uplink and signal receiving systems and Sony PMW-F55 Cine Alta 4K Digital Cinema cameras for playback on Panasonic 65-inch 4K TVs.
The broadcast is the first to provide real-time Ultra HD TV via a satellite link on a single set-top box chip, the companies claimed.
“Elemental is committed to supporting real-time HEVC today and Ultra HD service launches in the months and years to come,” said Keith Wymbs, chief marketing officer for Elemental Technologies. “We are proud to support NTV-PLUS and to work with Broadcom in supporting the 2014 Sochi Games and enabling this historic 4K HEVC satellite transmission.”
Oleg Kolesnikov, chief technology officer of NTV-Plus, said, “Building on our broad sport programming and satellite offerings, broadcasting the Winter Olympics in 4K resolution shows what can be accomplished when operators and silicon vendors work together to deliver Ultra HD content.”
Broadcom, QLogic announces sale, purchase of certain assets, ASIC partnership
Broadcom Corporation (BRCM) and QLogic (QLGC) announced a definitive agreement under which QLogic will acquire certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to certain intellectual property relating primarily to Broadcom’s programmable NetXtreme II Ethernet controller family. Total deal consideration is approximately $147 million in cash. In connection with the transaction, Broadcom and QLogic will enter into a long-term supply agreement whereby Broadcom will become ASIC supplier to QLogic in support of the NetXtreme II product line. Concurrent with the closing, it is expected QLogic will license certain Broadcom patents under a non-exclusive patent license agreement that will cover QLogic’s Fibre Channel products in exchange for a license fee of $62M. The transaction has been approved by the boards of Broadcom and QLogic and is subject to customary closing conditions. The transaction is expected to close in Q1. Excluding potential one-time gains related to this asset sale, Broadcom expects the transaction to be slightly accretive to EPS in 2014.
Samsung seems to be in no mood to rest after the laurels earned by its major product categories: smartphones, tablets and smartwatches, as the company is said to launch a new tablet series and the Galaxy Gear successor at MWC 2014.
ZDNet Korea has learned from sources that the Samsung Galaxy S5 will be joined by a new tablet series, believed to be dubbed Galaxy Tab 4 and the long-rumoured Galaxy Gear successor, named Galaxy Gear 2 at the February 24 event in Barcelona at the sidelines of the MWC 2014.
The site claims that the alleged Galaxy Tab 4 tablet series will be an upgrade from last year's Galaxy Tab 3 tablet series which was powered by a dual-core processors. The site also reveals that the rumoured Galaxy Tab 4 tablet series will come in three sizes with 7-inch, 8-inch and 10.1-inch displays. Previous rumours indicated each would sport three connectivity variants, namely, Wi-Fi, 3G and LTE.
The tablets in the alleged Samsung Galaxy Tab 4 series are said to pack a 1.2GHz quad-core processor, support up to 64GB expandable storage, 6800mAh battery and run Android 4.4 KitKat out-of-the-box.
In addition, ZDNet Korea notes that Samsung can also showcase the Galaxy Gear successor along with Galaxy S5 and the alleged Galaxy Tab 4 tablets at MWC, something we've heard previously, from a Samsung VP. Earlier reports had suggested that Samsung has been busy developing the successor to the Galaxy Gear smartwatch, which is said to be 15 to 20 percent thinner than the current smartwatch. As of now, there is no word on specifications of the rumoured Galaxy Gear smartwatch. The site suggests that the Galaxy Gear successor will come with an affordable pricing.
Recent reports have indicated that Samsung's unPacked 5 event, which is expected to see the next Galaxy flagship smartphone launched, will be a low-key event.
On Tuesday, an alleged leaked image of the Samsung Galaxy S5 retail box packing was spotted revealing innards of the device.
Leaked box image suggested a 5.25-inch QHD (1440x2560pixels) Super AMOLED display, 2.5GHz quad-core processor, 3GB RAM and a 20-megapixel rear camera with a 2-megapixel front shooter. The image also reveals a 3000mAh battery and the Android 4.4 KitKat OS.
BCM23550 is a dual- or quad-core SoC aimed at sub-$300 LTE smartphones. Here are the highlights:
Delivers 150Mbps Category 4 speeds on FDD-LTE and TD-LTE networks, 42Mbps 3G HSPA+ and 2G
BCM2095 LTE RF transceiver enables FDD and TD LTE/3G/2G band support for worldwide roaming
dual-band Wi-Fi, Bluetooth smart, GPS and near field communication (NFC)
VoLTE and HD voice support
Pre-integrated with the Android KitKat operating system
HD display, imaging and graphics
Reduces LTE modem power consumption by up to 30 percent for extended hours of use
Utilizes Broadcom’s pin-to-pin compatible dual-core M320 or upcoming quad-core M340 LTE SoC
Design reuse between dual-core and quad-core basebands for developing multiple devices with the same platform design to cut the cost
Certification for Category 4 (Cat 4) speeds in FDD-LTE and TD-LTE modes with seamless worldwide roaming capabilities.
The M320 SoC is ready for production and the upcoming quad-core M340 LTE SoC would be available to sample in the first half of 2014.
Shipments will eventually shoot up to 1.2 billlion units in 2018, predicts IHS Technology. But will consumers bite?
Jacqueline Seng/CNET Asia
Smartphones outfitted with near-field communications could see a jump in shipments from 416 million this year to 1.2 billion in another four years, says research firm IHS Technology.
Shipments of phones equipped with the wireless technology rose from 120 million in 2012 to 275 million in 2013, a gain of 128 percent. This year's number could rise by an additional 50 percent. In total, shipments could grow 325 percent from 2013 through the end of 2018, according to IHS.
Android smartphones topped the NFC market last year with 254 million units, or 93 percent of all NFC-equipped cellphones. By 2018, the number of Android phones with NFC will shoot up to 844 million, according to IHS. But the percentage will shrink to 75 percent, meaning other companies will jump in.
Broadcom (BRCM) and NXP Semiconductors (NXPI) both make NFC chips.
While entry-level smartphones are getting to be quite good these days, few of them have fast LTE; many have to make do with either basic LTE or 3G. If Broadcom is successful with its just-revealed M320 and M340 system-on-chip designs, though, advanced 4G could soon be very affordable. The new chips respectively bundle dual- and quad-core processors with 150 Mbps LTE radios, making it easier for small firms to ship cheap handsets (Broadcom expects sub-$300 pricing) with speedy internet access. They're already integrated with Android 4.4 KitKat, too, so companies don't always have to fuss over software support. Broadcom isn't saying when phones with the new chips will reach the market, but it's currently delivering sample units to "leading" manufacturers.