Most days I check Anandtech because the staff there does an excellent job of reviewing new computers, smartphones, and peripherals. By excellent I mean they actually give details about the software and chips used in the devices, and also run benchmarks. Today the only chip stocks I own are AMD and Marvell (MRVL), but my customers own (far larger) positions in other technology companies, so I follow the industry as best I can. Today's review of the Nokia N8 smartphone should be of particular interest to technology investors since it illustrates a fundamental shift in computing technology.
The N8 is "the first Nokia phone to have a discrete GPU." GPU is Graphics Processor Unit, as opposed to the more general purpose CPU, Computer Processing Unit. Smartphones are now expected to have excellent displays, which is hard to achieve without a GPU assist. But for years now AMD and NVIDIA (the rival makers of high-end GPUs for personal computers) have been talking about how computer work loads are starting to shift from being CPU-bound to GPU-bound. This is not just because of the need to have large, detailed, rapidly changing displays for gamers. It is because many ordinary computing tasks can be done faster if they are broken into parallel processes that accelerate results.
The Anandtech N8 article is the first time I have heard someone say the transition has already been made in an actual device (aside from professional video content creation machines). "You see, pretty muhc everything in the N8 runs around the BCM2727 media processor. I would hazard a calculated guess that appart from lightweight low-level OS functions and interfacing with the baseband and other radios, there isn't much else for the CPU to do on the N8."
I think that in effect the Broadcom (BRCM) GPU is acting as a DSP (digital signal processor) in addition to doing graphics processing, leaving the CPU little to do. Note that the 2727 (like AMD's new combo CPU/GPU chips) can output 720p HD video through an HDMI port.
NVIDIA has tried to place itself at the center of the GPU revolution, but it's anybody's game. There are two fronts right now: graphics for notebooks/PCs and graphics for cell phones/tablets. The graphics for smartphones can't display games on big screens at a high frame rate (which smooths the action) yet. But in 5 years, maybe sooner, they should be able to do that. The big differentiator is that anything that runs on batteries has to do its graphics work with minimal watts, but a machine plugged into the electric grid can do a lot more a lot faster, using a lot more watts (say, 200 watts versus 1 watt). NVIDIA's strategy is to keep rolling with its high end discrete graphics units while rolling out mobile combined CPU/GPU chips based on the ARM architecture. These would integrate its current offerings that work with ARM, but with the GPU on a separate chip.
AMD's strategy is called Fusion, which combines CPU and GPU on a chip based on the 8086 architecture.
Intel's strategy is to advertise, and hope that the reviewers dependent on its advertising revenue do a good job not mentioning that its current generation of combined CPU/GPU chips, code named Sandy Bridge, are instantly obsolete because they are a generation behind both NVIDIA and AMD in graphics capacity (ask for DX11 capable computers, and you have eliminated Intel, which had trouble implementing the now ancient DX10 standard) and in low-power consumption. Also, Intel is using its vast resources to get back into the ARM-based architecture. They sold their ARM mobile chip unit to Marvell Technologies a few years back. Marvell has since become one of the bigger players in ARM devices, most notably with its chips inside some Blackberry devices and the XBox 360 Kinect.
Then of course, in addition to Broadcom, we have Qualcomm, Apple, TI, Samsung, etc., scrambling to combine graphics and CPUs into single chips or small chip sets to power smartphones and tablet computers.
Software programming is changing too. Want a job? Show you can recode older non-parallel software for parallel processing on GPUs. Lots of shortages in that department.
For investors, you might want to buy a piece of every company in the race. I am certainly not certain who will emerge a winner. On the other hand, there are no pure plays here. A victory in smartphones would add very little to Intel's fortunes, or Samsung's, but it is essential to Qualcomm. Broadcom itself has a diverse set of chip products that cover Ethernet, set-top boxes, and Wi-Fi, among others.
See full Anantech Nokia N8 Review