The IoT community recently looked in disbelief as Intel started to dismantle its IoT efforts – the amount of emails we received is quite surprising, as we’re not exactly a logical place to go for IoT information. However, Intel terminated the business division that was developing wearable devices such as fitness trackers, digital clothing, baby monitors, etc. It also EOL-ed (End-of-Life) numerous IoT products with the notable exception of Curie, which is quite popular. There’s a clear reason why, and it can be found in recent ‘resurrection’ of Google Glass in ‘Enterprise Edition’, as well as wanting to react to popular products from Vuzix and ODG (Osterhaut Design Group).
ODG AR products use Qualcomm ARM-based Snapdragons, which is the same path Vuzix uses even though Intel unceremoniously exited the strategic partnership with Vuzix, just 18 months into relationship. Intel didn’t wrote off its $25 million investment as the company kept 22% stake of Vuzix. You might conclude the company is making sure they keep track of how current and future ARM-based Vuzix products perform on the global market.
While Glass 2.0 transpired to be ‘Enterprise Edition’, there’s no beating around the bushes when it comes to Google’s burning problem – first Glass AR headset used TI OMAP 4430 ARM-based processor, now six-year old processor which is no longer available for purchase as Texas Instruments removed its OMAP line and Sitara is hardly a low-power replacement.
Thus, it isn’t surprising to learn how Intel’s New Technologies Group (NTG) is pushing AR / VR strongly, as they believe it is an ideal place to manufacture low-power chips and sell at premium margin. We’re talking about less than a dollar to max. couple of dollars in cost for an already existing in-house IP, aided now by acquisitions of Altera and MobilEye. Those chips are then tested to be certified as ‘commercial’, ‘industrial’ or ‘mil-spec’ (military) and selling them for x000% gross margin. If AR/VR really takes off, selling 10-20 million of those chips would mean a lot for the bottom line, with the investment not being as steep as competing against established competitors.
It is common knowledge that TI made a strategic mistake when then new CEO came in from analog perspective and worked on shifting the digital/analog company into the analog arena. The sheer volume of missed units TI could have shipped at a good-to-great margin only speaks of lack of understanding how the market developed.
All of these shifts have one common thing – Intel’s upcoming silicon for AR/VR headsets, which is rumored to power the commercial version of Google Glass. The question is, is Intel going to play it nice and collaborate with Google on Glass Enterprise Edition, with Microsoft on consumer version of HoloLens (Microsoft ended up developing custom silicon, just like they had to go with custom IP for Xbox consoles), or will the company launch its own branded AR product?
It should not be a surprise to start counting the days for Intel’s reveal of mixed reality strategy and related products, intended to capture both AR and VR markets.