Texas Instruments Finds Smartphone Business Doesn't Add Up

Earlier this week, Texas Instruments revealed plans to reduce the amount of resources it's channeling into the smartphone market in favor of broader markets. Processor growth has been slowing down at Texas Instruments, and with competitors like Qualcomm and NVIDIA gaining ground, Texas Instruments has just figured its efforts will be better served elsewhere.

Texas Instruments' next target? In general, more places where its competitors aren't so much, but more specifically like industrial clients, those in the car industry, among others. The senior vice president for embedded processing, Greg Delagi, said of Texas Instruments' motives in making that decision, "We believe that opportunity is less attractive going forward."


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Texas Instruments does plan to continue to support its current processors, and in turn, its current customers. What's unclear, however, is just how long Texas Instruments will provide that support. Some analysts, like JoAnne Feeney of Longbow Research, believe that Texas Instruments may well completely pull out of smartphones and tablets altogether, saying, "TI made it very clear they no longer want to be in the business of proving application processors for smartphones or tablets.".

As the push is on to get more mobile devices in more platforms, it makes some sense for Texas Instruments to be moving into those platforms, and out of places where the competition is thick. If driverless cars have the market growth that some believe they will, for example, it would likely prove a good market for Texas Instruments to enter, as those systems will need specialized processors to manage all the information they receive.

Meanwhile, Qualcomm and NVIDIA have done some impressive things in the tablet and smartphone arena, and though it would seem like the tablet and smartphone space is a growing market overall, if there are too many competitors in the space, the market often can't grow fast enough to provide significant profit for all concerned.

Only time will tell whether Texas Instruments has truly made the right decision, but given the other opportunities in the market, there is at least some evidence to suggest that this was a good move for them.

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