原创 Intel's embedded chief has great prospects

Ton Steenman, Intel's general manager for its Embedded and Communications Group, says the company will continue to grow its footprint in the embedded market. For all the talk about Intel struggling to take a bigger chunk of chip sales to the embedded market from ARM-based devices, the general manager of Intel's embedded unit says the company has grown its embedded business significantly in the past few years by taking market share—a trend he predicts will become more pronounced in the years to come.

Intel set a record in 2010 with $43.6 billion in sales. But 92 percent of that revenue came from chips for PCs and servers. Combined, Intel's Embedded and Communications, Digital Home and Ultra-Mobility groups accounted for only 4 percent of the company's 2010 sales, or about $1.74 billion.

But according to Ton Steenman, general manager of Intel's Embedded and Communications group and vice president of the Intel Architecture group, over the past 10 years, Intel's embedded business has grown at a compound annual growth rate of 18 percent—more than the overall market and faster than Intel's overall growth.

"We clearly have gained market share," Steenman said during a recent press briefing in San Francisco.

What's more, Steenman said that after growing revenue in embedded 35 percent in 2010 compared to 2009, the unit expects sales to grow about 25 percent per year over the next three to five years.

Why? Steenman said seeds planted in the form of design wins over the past few years are starting to bear fruit. Lead times on embedded products are longer than those in the PC and consumer electronics markets—upwards of 18 months to several years. But once the products finally hit the market, Steenman said, they hang around for five to 10 years, if not more. Thus, design wins scored by Intel late last decade are paying dividends now and should continue to do so for the foreseeable future, he added.

"It's really about building an annuity business," Steenman said. "When that business builds up, you've got that long tail of revenue. That's where we've seen a lot of our growth."

Over the past couple months, Steenman—who took over Intel's embedded group late last year and has been with the company since 1982—has been talking up Intel's work with the Addias shoe company to build a "virtual footwear" retail kiosk. He's also been touting Intel's work with a company called Respondesign to build a connected exercise gym in recent appearances, including at International Data Corp.'s Smart Technology World last month.

In these cases and others, Steenman said, Intel engineers worked with the customers to develop a concept from the ground up. He acknowledged that Intel must pick its spots in such collaborations, which involve engineers and other resources. He said the company allocates resources to such products not necessarily because of the volume of chips that that particular customer may buy, but instead chooses them because they may serve as examples for other companies that may develop similar products.

"It really helps us to make it clear how our technology can solve some of these problems," Steenman said.

The Wind River advantage

Intel has been trying for years to grow its revenue significantly outside of the PC, where it dominates the market for microprocessors. Starting in 2007, Intel began investing more heavily in marketing its technology to the embedded market, Steenman said, as changes in the embedded market—including a need for greater connectivity—created new requirements that moved closer to Intel's core capabilities. In the summer of 2009, Intel upped the ante—shelling out $884 million to acquire embedded software provider Wind River Systems Inc.

Steenman said the investments—particularly the Wind River acquisition—have been a big help in enabling Intel to optimize its offering for the embedded market. "It's a huge differentiator for us," he said.

Steenman said 60 percent of embedded customers for Intel's Atom processors are new to the company, which presents both opportunities and challenges. Sixty percent of those new customers are also conversions from other architectures, presumably mostly ARM and MIPS, he said.

With the embedded market undergoing dramatic changes and requiring more connectivity, Intel is poised to take a bigger slice of it in areas such as retail, automotive, factory automation and energy efficient systems, according to Steenman.

"We will continue to gain market share and a larger footprint in embedded," Steenman said. "We have the opportunity as a company to help the industry really transform itself."

Dylan McGrath

EE Times