There was a time not too long ago when an Intel Developer Conference (IDF) was considered one of the most anticipated PC industry events of the year. Yet that seems to have all gone to hell after Apple released their first iPad with an A4 processor inside. Apple dared to shatter the standard computing model by abandoning the traditional PC chip makers – and the Chip Gods fell to earth with a mighty thud. Was Intel caught off guard by the ferocity of the iPad's success? Yes – most definitely. They've been caught off guard ever since the debut of the iPhone in 2007. In fact all of Apple's competitors appear to be in some kind of perpetual stupor with every attempt at a counter attack being as anemic as the last. To be honest, Intel could never do it alone and with Microsoft fumbling in the dark and the amateurish Android looking more like Windows for the mobile age every day, it doesn't look promising. In today's report we hone in on Intel's central IDF keynote that honestly attempted to address the iPad revolution head on. Was it enough? You be the judge.
It's About the Big Picture Stupid
Beyond the actual keynote messages themselves, which we'll cover to some degree in a moment, there was a slight undertone playing out at IDF; a slight air of sarcasm perhaps at the media's always being in-their-face about all-things tablets. They understood the urgency; they did. Their top executives tried their very best to put a shiny Intel topspin to this tablet phenomena that they really didn't see coming. But as blind-sided as they were, they wanted everyone to just calm down, take a deep breath and understand that we're not even out of the first inning of the first game in a World Series best of Seven.
One of Intel's best lines that drove this simple message home was unfortunately delivered on day two of IDF. It was delivered by Kirk Skaugen, Vice President, Intel Architecture Group - General Manager, Data Center Group.
Mr. Skaugen lined it up this way: "This is probably the most startling statistic that I've seen in the last year. In the entire history of the internet we've had about 150 Exabytes of data transferred through the internet. As we started entering 2010 we thought that we'd have about 175 Exabytes, but by the time that we left 2010, 245 Exabytes of data had trafficked across the Internet. That's more in one year than the entire history of the Internet – combined."
In the big picture, "Intel is committed to deliver and bring another billion people unto the Internet with a lot of Atom devices" and "We're going to connect 15 billion connected/embedded devices" by 2015. "Companies like Ericsson are talking about 40 billion connected devices by 2020" while conservatively expecting to surpass 1000 Exabytes of data in that time frame.
With numbers of devices like that coming to market over the next four years, 50 to 100 million tablets in the short term is but a mere drop in the bucket. That should have been one of the opening lines of IDF Beijing 2011 because it set such a visual for the bigger picture. With that said, we first look at the best keynote of the event that, you guessed it, dealt with the tablet phenomena head on.
Keynote Theme: Accelerating Amazing
The Rise in Tablets
Although Doug Davis, Vice President/General Manager, Netbook and Tablet Group at Intel, was the second keynoter on day one of IDF Beijing, he definitely put on the best keynote of the entire event in my opinion. Though, admittedly, it certainly got off to a rocky start.
His keynote actually began with typical Intel propaganda; a video about Intel's 40 years of amazing things with Intel Inside. Inside Servers, Inside desktops and laptops: "So just imagine what will happen now that we're letting amazing out of the box (= image of tablet with Atom)." And then that crazy old, outdated Inside Intel jingle played out and I just wanted to scream: Kill it already! If Intel is trying to reinvent their image and want to take "amazing out of the box" – then they need to inspire their base of developers and consumers with ads like this, or even this. Don't tell us that you get the future when you're knee deep in your glory day's ancient jingle. Turn the page and get on with it.
With that disaster de jour out of the way, Davis rolled up his sleeves and began his keynote in earnest. "We're so excited about this opportunity that we've created a new organization focused on netbooks, tablets and everything in-between. We're significantly increasing our focus to bring the amazing, personal and mobile experience of Intel Architecture to a whole range of new companion devices." This was a concurrent theme throughout his keynote: Companion Devices.
"And to accomplish this at Intel – we're moving fast," stated Davis. "In fact we're moving faster than Moore's Law. But before we look forward, let's take a look back. In 2010, clearly we saw the rise of tablets."
"Last year at the Beijing IDF, as I was standing on this stage, the Apple iPad had only been on sale for about a week. According to IDC, there were about 18 million tablets that shipped worldwide throughout the whole year, 2010. And this growth obviously created tremendous excitement. In fact I remember how excited I was when I got my first tablet. To me it delivered a kind of new and different experience. And what I like best about that experience is that it gives me instant access to information."
"Now, at my home," continued Davis, "we're pretty spontaneous about going to see a movie. Often time on a Saturday afternoon my kids will say, hey Dad let's go to a movie and I'm able to pick up my tablet, find the theatres that are nearby, pick a movie that we like, pick a time. But what it really enables me to do is to be able to have that time with my family and it provides that instant access; it gives me the ability to do the things that I want to be able to do. And in that sense it really is my companion – because a companion is one who knows you, right?"
Diving Into Apps
Knowing that Intel now has their AppUp service rolling, Davis wanted to tie that in to set their tablet platform up on a good note. "Well, in a very similar fashion" stated Davis, "companion devices are all about a personal connection between the user, the device and the applications that perform on that device."
"While apps started out on smartphones, we're now seeing them in netbooks and in tablets and in televisions. And we'll even see applications soon in our cars. And in fact, last year apps had really gone mainstream. They're transforming the way that we think about software. The way we get software and the way that we interact with software. In fact in the United States in 2010, a group called the American Dialect Society named Apps as the word of the year for 2010."
That was a nice tidbit of information and of course Davis didn't bother to credit Apple, so I will: Congratulations Apple because you made "App" the hip word of the year all by your lonesome. It didn't fall out of the sky; it was Apple who engineered their marketing message with precision with "There's an app for that," remember? It's also why Apple is fighting for the App Store trademark whether anyone in the PC world likes it, or not (Ha!).
New Device Form Factors
Next up was form factors: "There are also new hardware developments that are taking place. Today's most prominent companion devices are netbooks and clamshell types of form factors and tablets in kind of a slate form factor. But we're seeing a significant amount of innovation in a whole new category of devices that are beginning to emerge; Devices such as convertible, detachable, sliders, dual touch screens – all combining features from phones and tablets and netbooks that could deliver unique user experiences not only for content consumption but also for content creation."
Perhaps this is where Intel's minions will begin to make some inroads on Apple's iPad over time. Different form factors do appeal to different market segments be it the enterprise, Health Care, different consumer segments or demographics. I'm certainly one who's hoping to see a hybrid unit come to market as Apple hinted at back in 2008. I'm just not sure that it's a priority at the moment - which leaves that door wide open for their competitors.
Companion Computing: We're Only in the Early Stages
Davis began to get to the heart of Intel's message in the second half of his keynote: "While a lot has happened in the past year, we're really at the beginning of what we could consider this companion computing type of innovations. And the steepness of this curve will really be determined over the next two years. But the full curve, the full business model here will take a decade or more to play out."
"Now we know that all technology mature and evolve over time. If we think of some examples, we could go back to the early 1980's and we think about the PC. Within a couple of years many people would have said hey that kind of form factor has matured as well. But nearly 30 years later we continue to see a significant amount of innovation in the PC Space. So it's really exciting to me here, to be at the beginning of this companion computing kind of category. And this category really gets defined by a user experience."
Accelerating Moore's Law
What would the IDF be without Intel's national anthem called "Moore's Law," right? And they didn't disappoint again, unfortunately. Davis continued by stating "So like clockwork, generation after generation we've done this every two years. But now Intel is accelerating the Atom System-on-Chip roadmap. And over the next several years we're going to be moving faster than Moore's Law; New products on three process technologies over the next three years." In other words, they won't be able to compete with the iPad for a little while yet.
Lame-o: Netbooks vs. iPad
In the meantime Doug Davis briefly covered their next generation 32nm Cedarview processor that will run on entry level desktops on through to fanless notebooks. For netbooks, it will mean sleeker designs that run quieter, run 1080p video, Blu-ray 2.0 and offer integrated HDMI for a full range of high-def video experiences – for Christmas 2011.
The slide presented below came from Intel's news room PDF on the next generation Atom processor. The footer note state that the information came from NDP's iPad owner study 2010. Intel's analysis attempts to show-off netbooks strengths versus those of the iPad. Each was arbitrarily given four unique strengths.
Beware: Propaganda Ahead
Marketing spin like this only exposes Intel's blind spots. The netbook is a dumbed down notebook experience. An iPad is a whole new exciting experience and category that netbooks can't touch. The slide is visually attempting to "dumb down" the iPad's value and box it into a tie with a netbook. Only Intel's rubber room researchers could have dreamed up this type of age-old propaganda that's sooooo obvious (ha!).
In Davis' keynote segment about future Intel tablet experiences, he stated that Intel had recently acquired a company by the name of Silicon Hive. This new addition will eventually provide Intel with the technology and knowhow needed to integrate DSC-class high-end image quality into their architecture to support device cameras with up to 16 Mega Pixels and smooth digital zoom for video. This technology will also assist Intel to deliver TV services to future tablets and portables.
"Companion computing devices," stated Davis, "also hold great promise for advancing the usefulness of some of the other technologies like augmented reality, advanced image recognition, integrated sensor technologies. We're committed to providing a full spectrum of connectivity choices and the capabilities that come with all of those connectivity technologies. Our acquisition of Infineon, now Intel Mobile Communications, allows us to be able to do that. This business gives us access to state of the art connectivity solutions for 4G and beyond."
Davis also talked about how Intel is accelerating innovation in education with a company called Kno which specializes in digital textbooks for education. According to Wikipedia, Intel licensed Kno's hardware design in April so that the company could now focus on developing software for that tablet/hardware to make learning engaging, effective, and social for students. The dual-display tablet form factor will definitely become more popular as costs drop and books become the driving force for this in the market – especially in education.
Davis also pointed to another important Intel acquisition this year of Secure Key. That company's website states that "The SecureKey solution leverages today's contact and contactless cards, as well as NFC phones." So the race is on for the iWallet and keyless solutions as Apple's many NFC patents have given us insight into.
Next Generation Mobile Processors
In respect to new tablet processors, Doug Davis stated that details pertaining to their newly advanced 32nm processors named Medfield and Cloverview would be revealed later this year, likely at their IDF fall session. While little is known about Cloverview at the moment, there are details readily available for Medfield here. The most important feature of Medfield for smartphones is that it will deliver LTE or 4G. That may be a great sign that Apple's iPhone will also be adopting LTE for the iPhone 5 this fall.
In concluding his keynote, Doug Davis made a classic Intel pitch: "We're truly at the very beginning of an immense opportunity. Companion Computing devices are like a friend. They work with you and your other devices to enhance your life. The way that you work, the way you play and the way that you interact with your friends. This is about having the choices to deliver experiences that are right for you; Ones that will evolve over time and adapt to your needs.
Intel laid out their case for competing with the iPad and even a peek at their "bigger picture" taking place behind the scenes of the tech sector in respect to the embedded world to come. It's not about 20 million or 100 million iPads according to Intel, it's about billions of embedded things all communicating with each other, whether they be PC's, tablets, TVs, Kitchen appliances or taxi cab signage. It's about billions of interconnected devices. It's something that Doug Davis spoke about at last year's IDF Keynote.
Intel's Doug Davis' tablet centric keynote hit on a constant theme of the tablet sector being in its infancy. Words and images throughout his keynote reinforced that theme and message that the tablet market was only in the "early stages" and that it was only the beginning of this sectors life cycle. Davis framed that message with Intel's 40 years of owning the server, desktop and laptop markets over time and that the tablet sector would eventually be theirs too. Doug Davis made that point by stating that Intel would be ramping up over the next two years and that what really mattered was – who would be leading this sector in a decade.
Intel's marketing and/or analysis department tried to dumb down the iPad's relevance so as to equate it to the value of netbooks. Yet in perspective, that propaganda was actually initiated back in Sept 2009. It was presented in a slide found in CEO Paul Otellini's keynote. At that time Otellini tried to belittle Apple's iPhone popularity in favor of Intel's supposedly more popular netbook with mythical projections that never seemed to pan out. This is the world through Intel's rose colored glasses. And they talk about Steve Jobs' reality distorting field: ha! Not even PC Penicillin will cure Intel's need to continually distort some aspect of Apple's popular mobile products because they're not running on Atom.
Up until this very day we're continually seeing Apple's competitors building products that mirror those of Apple's from the MacBook Air to the iPad and even the iMac. They're even trying something new: Copying future Apple products by following Apple's patents. Proof of that could be found in Apple's iMac Touch desktop form factor patent that was published in August 2010. Months later, it magically came to market via the HP touchscreen PC. Of course it was much bulkier and uglier than an iMac, but that was to be expected. The point here is that the concept was copied in order to try and get an inch on Apple. And they couldn't even get that right.
There's no doubt that Intel has displayed an ongoing trend at digging at Apple's latest successes. In October 2008, Intel Pankaj Kedia, director of ecosystems for Intel's ultramobility group took a shot at Apple's iPhone's supposed lack of power running apps and was made to apologize. Then, caught on camera a year later, Intel's head of marketing Don MacDonald took a crack at Apple not being able to find YouTube on an iPhone and running video (between the 7:08 and 7:46 mark) properly – all the while stealing Apple's marketing visual of carrying the internet in your pocket (See under "iPhone").
There's even uneasiness between Apple and Intel in respect to who owns the Thunderbolt trademark. So while Intel is claiming that they'll be king of the tablets over time, I find it to be disingenuous. What Intel is really waiting for is Steve Jobs to finally step down and retire. Because as long as Steve Jobs is at Apple's helm, he'll continually show these guys off to be what we've always known them to be: nothing more than copycats and/or wannabe copycats. For me, Intel's IDF message got lost in their arrogance. For now, they're losing and losing badly to Apple's iPhone and iPad: end of story.