State of Smartphone SoC Market [Explained]
A System on a Chip (or SoC) is considered to be the heart of a smartphone. An SoC houses CPU, GPU, DSP, modem and others, so no wonder a good SoC can make a difference between a pleasant and a laggy smartphone experience. There are several SoC vendors in the market. Amongst these, Apple, Qualcomm, Mediatek and Samsung are the big players. Others like Huawei, Intel and a numerous Chinese SoC vendors can be considered as the smaller players in the industry.
Different SoC vendors have different approaches to their products. In this article, we will be discussing about some of their efforts:
Table of Contents
To start off, we have Apple. Currently the most valuable company on earth, Apple has made some of the best SoCs in the world in recent times consistently topping benchmark charts. For Apple, the focus is to create an SoC that suits their products which in this case are the iPhone and iPad predominantly.
Since Apple only has to create SoCs for its own products, they get the unique advantage of adding specific features to the SoC that will make it perform better on their own devices and this has been the case with iPhone. There have been several examples to prove the same:
- FDE – FDE stands for Full Disk Encryption which has been a feature of iPhones for a long time now. Given the reports by Edward Snowden and several others regarding Mass Surveillance, even Google made FDE mandatory by default starting with Lollipop. However, most Android smartphones didn’t have dedicated hardware on their SoCs to handle the encryption which led to severe penalty in performance and subsequently made Google to relax the rules. Google again modified the rules starting with Android 6.0 stating that Android devices whose encryption/decryption performance is above a certain level need to enable FDE by default, however very few Android smartphones will actually have the hardware to meet those standards. Apple on the other hand has been able to enable FDE on all their iPhones since iPhone 3GS without any performance hiccups. Also, it must be noted that the performance of iPhone 3GS as an SoC is even worse than something like Qualcomm SnapDragon 200 however the presence of specialized hardware for encryption/decryption made it a breeze while even high end SoCs like SD 805 struggle with encryption/decryption without the help of dedicated hardware on the SoC.
- Motion coprocessor – Health and fitness were begining to become an area of particular interest to Apple as evidenced by the launch of Health Kit by Apple. Most fitness apps require constant monitoring of various biological data such as steps taken, distance covered etc. Recording all this data through the main CPU on the SoC would lead to huge battery drain as the CPU would have to be working 24×7. To solve this, Apple came up with a low power co-processor whose sole prupose was to process all this data. This co-processor was based on ARM’s Cortex M series which consumed far lesser power than ARM’s Cortex A series which the main CPU is based upon. To be fair, Motorola did come up with a similar thing around the same time.
- Secure Enclave – Apple’s acquisition of Authentec laid a solid foundation for Apple Pay in the form of Touch ID. Touch ID which has been one of the finest implementations of a finger print scanner on a smartphone had to store those finger prints somewhere. Given how critically sensitive someone’s fingerprint data is and Apple’s tough stance of security and privacy, with A7, Apple created something called the secure enclave in the SoC that stored the fingerprint in a secure manner in the mobile device itself.
Be it FDE or motion co-processor or Secure Enclave, since Apple creates their SoCs with only their products in mind, they can add custom hardware at a much faster rate which helps them improve the experience of their devices.
For the same reason, they don’t have to indulge in the core wars either. There has been a trend in the Android SoC space where SoC vendors have been trying to add as many cores as possible to their SoCs. From Single to Dual to Quad to Octa and now Deca, the number of cores an Android device has can form its own Moore’s law of sorts. Apple on the other hand has stuck with two cores for quite some time now. The only exception being last year’s A8X which had three cores. Although Apple’s SoCs have lesser cores, don’t mistake them for being inferior as their single core performance has been the best in the SoC space ever since the A7 launched. Also, most apps can make full use of only two or at best four cores. Adding more cores doesn’t result in proportionately more performance.
Apple’s scale and the margin every iPhone carries with it also helps them fabricate their SoCs on the latest available process nodes that helps cut down the power consumption and increase performance. For example, the latest A9 chipset was fabricated on the 14nm/16nm process and this was also a dual sourced chip. What dual source means is that Apple asked both Samsung and TSMC to produce the A9 chip on their 14nm and 16nm process nodes respectively. According to industry experts, this would have led to a massive expense for Apple, but give the margin every iPhone carries and its scale, Apple could very well afford it.
Qualcomm is one of the most popular names in the Android SoC segement. Recently, the company has been facing some financial woes which has forced it to cut down its work force and also consider a possible split between the licensing segment and the chip making segment.
Modem as their strength
A great deal of Qualcomm’s strength lies in their modem expertise. Qualcomm makes some of the finest modems in the world. In fact even Apple, despite making their own SoC, licenses Qualcomm’s modem. Qualcomm’s modem expertise helps them a lot in North America and other developed countries. Qualcomm is the only ARM SoC vendor to have global carrier certification and this helps them a lot in the North American market where carriers get to pick as to which device they would stock and subsequently support on their network. Qualcomm’s modem expertise has also helped them in India and China recently where the roll out of 4G networks has helped them sell at the expense of Mediatek etc who were a little late to the 4G party.
Problems for Qualcomm
However Qualcomm has been at more trouble than ever recently.
- According to latest financial results, Qualcomm has been reporting revenue and profit declines compared to the previous years.
- They’ve almost lost Samsung which was by far their biggest customer.
- Qualcomm Snapdragon 810 was quite a disaster which tarnished the company’s image.
- There are rumors of Intel being the preffered modem vendor for Apple in the future. If that happens, it would be a big blow for Qualcomm, since they have already lost Samsung as their customer and losing Apple as well would heavily effect their finances.
The company has recently unveiled Snapdragon 820, which uses the Qualcomm’s first ever ARM v8 based custom core which is Kyro, a lot depends on the success and failure of Kyro going ahead.
Qualcomm doesn’t own foundries of its own and thereby has to compete with tons of other SoC designers for foundry space. Most often than not, Apple ends up buying most of the available space for latest/newest process nodes and Qualcomm, which isn’t as financially mighty as Apple, has to wait. This was especially clear when Qualcomm released the SD 810 on a 20nm process node while Samsung released the Exynos 7420 on a 14nm process node. Had Qualcomm released the SD 810 on the 14nm process node, the heating issues could have been reduced drastically.
The company has been making SoCs for quite some time now, albeit in small quantities. They were one of the first to venture with the idea of Octa core SoCs in the form of Exynos 5 Octa in the Samsung Galaxy S4. However, it was limited to mostly Asian countries and was also faulty in nature because of a bad CCI system. With time, Samsung has been working on improving their SoCs and with Samsung Galaxy S6, Samsung Exynos 7420 was one of the best SoCs available in an Android smartphone.
Exynos 7420 was also the first Samsung SoC to have shipped in all their models. Although unlike Apple, Samsung hasn’t been able to make much device specific additions to enhance the user experience. However, one key advantage Samsung has is that they own foudries.
Although Apple and Qualcomm design their own SoCs, they don’t own any foundry. A foundry is a factory where SoCs are manufactured, and worth several billion dollars. Samsung is the only ARM SoC designer that owns a foundry. This helped Samsung manufacture the Samsung Exynos 7420 on the 14nm process which gave it a key edge in terms of power consumption and heat generation when compared to Qualcomm Snapdragon 810 which was manufactured at a 20nm process.
The company also has its own Shannon line of modems and has also recently released an SoC based on its own custom architecture, but the reported performance and power gains are nothing extraordinary.
The company, although unfamiliar to people in the US, is a household name to those in India, China and other developing countries. It has recently began integrating its own 4G modems in its SoCs to make up for the lead lost to Qualcomm.
The company still primarily depends on stock ARM cores and caters mostly to Chinese and home grown manufacturers of developing countries. Mediatek has been trying very hard to break into the American market, but the strict carrier certification rules and lack of high quality (Carrier aggregation, MIMO etc) 4G modems as compared to Qualcomm has made it difficult for them to make a meaningful impact in America and several other developed countries.
Mediatek’s financials have also been a little troubled as the stock has been tanking consistently and revenues for the past two quarters were lower on a Y-o-Y basis. Despite Mediatek’s inferiority in 4G compared to Qualcomm, the company still has a pretty good hold on 3G. Their 3G SoCs had once dominated the Chinese market which uses its own proprietary TD-SCDMA 3G technology and also was popular amongst manufacturers of developing countries like India, Indonesia etc.
However, with the roll out of 4G networks in many of these developing countries, Mediatek now faces an uphill task against Qualcomm whose expertise and experience in 4G is much deeper than Mediatek. Also 4G uptake in China has been tremendous. China Mobile, China’s largest carrier for example has been achieving record net 4G subscriber adds. Even in countries like India, the shipment of 4G devices has been very high recently with Counterpoint noting that in India, 4G and LTE smartphones numbers grew at an astonishing 2400 percent rate climbing to 10 million units in Q3 of 2015.
Another issue with Mediatek is patents. Qualcomm derives a majority of its profits through patent licensing to its customers. These patents help Qualcomm’s customers prevent litigation. This was most clear in India when Xiaomi’s Redmi Note was suspended because Ericsson had sued Xiaomi as Redmi Note was using a proprietary technology for connecting with networks without paying Ericsson any royalty. Ever since then, Xiaomi has stopped selling any devices using Mediatek’s SoCs and their entire line up consists of Qualcomm SoCs.
Mediatek, thanks to its very low margins, has fabricated their SoCs on some of the oldest process nodes. For example even the latest high end Helios X10 is fabricated on the 28nm process. The older process node increases power consumption and there’s also a reduction in performance. Thankfully, the upcoming flagship SoC, the Helio X20 which has some temperature and speed improvements over Helio X10, but is still based on 20nm FinFet process, unlike Samsung Exynos and Qualcomm Snapdragon who have leapfrogged to 14nm.
This is not to say that Mediatek has lost out the 4G race, since they have beefed up their 4G portfolio over the years. Even though 4G shipments have been growing at a tremendous rate, the fact that a lot of Indians still use feature phones, there is still a lot of scope for shipment of 3G devices in India.
The company has been using what it calls a contra revenue model where it’s actually subsidizing the cost of SoC and promoting tablet manufacturers to use it. According to some estimates, the company loses around a billion dollars in its mobile business every quarter. The company feels that by subsidizing its SoCs now and by using them in tablets, it can remain relevant in the Android market.
Intel has also partnered with Google to release x86 version of Android much faster. Also, Asus seems to be a very supportive vendor of Intel’s SoCs. The huge losses in mobile are made up for by Intel’s still high margin PC and monopolistic server businesses.
The company has partnered with China based Rockchip and has also invested in a lot of Chinese startups. Intel also has its own foundries and their Atom line of mobile SoCs are manufactured in these foundries. Intel’s foundries are some of the most cutting edge in the world. It’s widely believed that Intel has been able to keep the power consumption of its x-86 based SoCs within check thanks to them being fabricated on some of the most advanced process nodes. Sadly, their mobile business isn’t getting the focus it deserves as considerable chunk of revenues still come from the PC business, and that takes most of the attention.
And then there are Huawei with their Kirin series of SoCs, Nvidia with Tegra series etc. But these are still very small as compared to the other five we discussed above. Things here change drastically, so stay tuned for more updates and more analysis on the mobile SoC market.