Deal with China’s top SoC maker gives Intel a massive footprint in China — without an expensive contra revenue program.
Intel and Rockchip announced today that the two have signed a strategic agreement that would see the two companies collaborate on building SoCs, particularly ones for low-end tablets running Android.
Rumors of such a deal were first reported by Chinese VR-Zone earlier this month.
According to a press release announcing the deal, the two companies will jointly develop an Intel-branded SoC platform. The platform will be based on an Intel Atom processor, not ARM, and will use Intel’s SoFIA 3G baseband.
As Intel CEO Brian Krzanich explained, the rationale behind the deal was to jumpstart Intel’s China business by taking advantage of Rockchip’s connections in the Middle Kingdom.
“It’s a great way to get in there and make additional products to add to our roadmap,” Krzanich said during a conference call with press and analysts. “Look at this as an addition to our roadmap, not as a change. We looked at this purely at access and speed to those markets.”
The press release announcing the deal was short on specifics on the extent of Intel and Rockchip’s partnership, and if Rockchip would bring anything to the table other than access to its partners, only saying that it would allow Intel to develop a broader portfolio of technology powered by its architecture.
“We are excited to work with Rockchip. With today’s announcement we’ve added yet another derivative to the Intel SoFIA family, and we expect to have them all in market before the middle of 2015,” Krzanich added in a statement. “We are moving with velocity to grow Intel’s offerings for the growing global tablet market.”
As the Rockchip-Intel deal has been made official, Intel’s SoFIA family is now three strong: the dual-core 3G version expected to ship in the fourth quarter of 2014, the quad-core 3G version made with Rockchip that is expected to ship in the first half of 2015, and the LTE version.
In statements later to the press, Krzanich noted that this agreement might see Rockchip and Intel collaborating on additional chips in the future. As Rockchip is China’s top SoC maker, it would be foolish for Intel to limit its cooperation with Rockchip to just SoCs geared towards low-end Android tablets. If Intel’s much-hyped “Internet of Things” takes off, most of the smart devices in the Chinese home — TVs, appliances, web tops, tablets and phones — would likely be powered by a chip from Rockchip. If Intel can get into this market, with the cooperation of Rockchip, it will have a huge opportunity.
It should also be noted that this deal provides Intel with an alternative to contra revenue to bootstrap its China business. Contra revenue is still a thing, and has not been cancelled, but this could also be a way to ensure that the funds available last much longer.
Check back later this week as we’ll have the on-the-ground insider’s perspective of this deal from Shenzhen.
More details on Intel’s deal with Rockchip are expected during its Computex keynote.