Lenovo marches off into wearables with chip design group
Lenovo CTO Peter Hortensius has confirmed in a wide ranging interview that the $34 billion computer giant has established a small chip design group. He told EE Times that this year is crucial for the wearables sector and weaker businesses may fold under the intense competition.
2014 is the year wearables have to prove they can "expand beyond fitness devices," said Hortensius, noting their "inherent limits in display, input, and size that make it difficult to find a winning formula."
Lenovo "has some ideas on how to do it and others do, too. It's very much a nascent market with a lot of experimentation going on, and we've got our own studies," said the engineer and former IBM PC executive, declining to say whether Lenovo will field its first wearable product this year.
Hortensius: We'd like to have the ability to implement core design features in silicon over time, but we are not trying to be a CPU company.
Hortensius did confirm the company has established a small chip design team. Last year EE Times reported Lenovo planned to expand a 10-person team into a 100-person unit to design chips for smartphones and tablets.
"We do think having some SoC design capability is important. I wouldn't say it's a major thing or massive investment. Right now it's just building up core skills. We'd like to have the ability to implement core design features in silicon over time, but we are not trying to be a CPU company."
Some chip design is currently in progress in the company's PC and smartphone division, he added.
Today, Lenovo invests less than 2 per cent of its revenues in R&D. The figure may edge up slightly when planned acquisitions of Motorola Mobility and IBM's x86 server group close, probably later this year, he told us. Lenovo expects to gain an estimated 2,500 engineers from Motorola and another 2,000 from IBM, adding to its total headcount of about 46,000 employees.
Like many companies, Lenovo has been expanding its ranks of software developers faster than its hardware engineers. "But we still believe it's really the balance of the two that creates the best differentiation."
Lenovo operates an online store for Chinese-language apps on Android, Hortensius noted. It logs some 20 million downloads a day and has had 6 billion downloads total to date.
On ARM vs. x86
With its plans to acquire Motorola's smartphone business and IBM's x86 server group, "it's almost a balance" when it comes to using the competing processor architectures, said Hortensius.
"We already do a huge amount of business with ARM, AMD, and Intel today, and we are quite comfortable with what they all offer."
However he was not bullish on ARM servers. He characterized them as "still an emerging trend more experimental than in any large deployments—there are challenges anytime you are the new guy."
In tablets, Lenovo already makes both ARM-based Android systems and Windows-based x86 and ARM devices. "It's a mix, and we've had good success in both," he noted, although Lenovo ranks fourth in tablets behind Amazon and Asustek today.
Lenovo is the only PC maker with a significant business in both smartphones and tablets, Hortensius told us. However, more than three-quarters of the company's revenues still come from traditional desktops and notebooks (below).
Hortensius has been in the CTO role just 30 days. He has held a variety of positions since he came to Lenovo in 2005 with the acquisition of IBM's ThinkPad notebook group.
"I'll help do the work to make sure the big acquisitions close and, beyond that, find the elements of a tech strategy that is more than the sum of the parts," he said, noting cloud services will play a role tying the various systems together.
In servers, the IBM deal will give Lenovo the scale and design capabilities it needs to compete in the fast-growing data centre segment. It already sells to China's big Web companies such as Baidu and TenCent.
- Rick Merritt
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