Windows RT Compatibility & Miracast Certification To Enhance TI’s Connectivity Solutions

TXN: Texas Instruments logo
Texas Instruments

With a complete exit from the baseband business by end of this year, Texas Instrument’s (NYSE:TXN) focus has shifted to its growing wireless and application processor business. The company has been trying to deliver the technology from its non-baseband products into adjacent markets that can give them more diversity, both of markets and customers. The application processors and connectivity division of the company contribute close to 20% to our current price estimate of $45.

Despite witnessing a declining market share over the years due to its exit from the baseband market, we feel that TI is capable of maintaining its current share for the period under review. We believe that the innovative product offerings in wireless connectivity and application processors would become new revenue drivers for the company. Here, we mention two recent development in the application processor and wireless division that reinforce our belief for the same –

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1. Miracast Certified OMAP Processors To Maximize Mobile Content Streaming Capabilities

Last month, the Wi-Fi Alliance announced a new certification program for Wi-Fi devices that support display applications. The new certified mark – “Wi-Fi certified Miracast”, will be designated for products that make use of Wi-Fi connection to deliver audio and video content over a peer-to-peer Wi-Fi Direct wireless network, providing an exceptional user experience. The technology ensures interoperability between devices such as smartphone and tablets, TVs, projectors and audio receivers.

The Wi-Fi alliance helps encourage the expanded use of Wi-Fi products and services in current as well as new markets, and has completed certification for over 14,000 products so far. [1]

Earlier this month, TI declared that its upcoming processors will be compliant with this new certification. The company will be using its Android devices for the new technology and claims that its Miracast certified chips will enable users to display full high-definition content from a mobile device onto a larger screen, over a secure wireless connection. TI illustrated Miracast using its OMAP4470 SoC at Computex 2012 this month; and its much awaited OMAP5 processors are expected to be launched with a Miracast certification later this year.

2. Windows RT Tablet Based on TI’s Processors

Windows RT is a version of the upcoming Windows 8 Operating Sysytem (OS) for ARM based devices such as tablets. The launch of Windows RT later this year is expected to threaten the comfortable dominance that Apple (NASDAQ:AAPL) currently enjoys in the tablet market. The major ARM based players that are expected to be part of the new OS are Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM) and Texas Instruments, amongst others.

With Nvidia and Qualcomm having already showcased devices with their chips running on the upcoming Windows RT, Texas Instrument is not too far behind. The company showcased Windows RT on its OMAP processors based system at Computex 2012 earlier this month. Though the tablet is still work-in-progress, the company is confident that it will be ready with its hardware running on Windows 8 by the time the new OS is officially launched in the market.

We believe that dropping out baseband from its portfolio would enable TI to devote greater focus on stand-alone application processors and connectivity solutions, which are aimed at the more rapidly growing smartphone and tablet markets.

Our price estimate of $45.39 stands at a premium of around 60% to the current market price.

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  1. Wi-Fi Alliance to Launch Wi-Fi Certified Miracast to Deliver Display Applications, Wi-Fi Alliance Press Release, May 31, 2012 []