TI Introduces New Modules To Enable Faster WiFi Connectivity For IoT Devices

-4.45%
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TXN: Texas Instruments logo
TXN
Texas Instruments

Earlier this week, Texas Instruments (NASDAQ:TXN) announced the availability of the SimpleLink modules for Internet-of-Things (IoT) applications, allowing makers of web-connected embedded and wearable devices to quickly add Wi-Fi connectivity. Launched in June last year, TI’s SimpleLink Wi-Fi platforms (CC3100 and CC3200) for IoT applications enables customers to simply and securely add embedded Wi-Fi to a wide-range of home, industrial and consumer electronics using a phone or tablet application. While one version comes with a programmable ARM-based microcontroller, the other offers Wi-Fi only. Aiming to jump start WiFi development, the modules helps developers lower development costs, reduces time to market, and simplifies procurement and certification.

Though TI exited the mobile device WiFi/ Bluetooth combo chip market in September 2012, the company is a key provider of WiFi chips for the embedded market. It has been focusing on transitioning its operations to become a pure analog and embedded processing company, segments that it believes will offer long-term growth and less volatility compared to the past. With a market share of 19%, TI is one of the leading players in the analog semiconductor market and derives over 60% of its revenue from this division. On the other hand, the company accounts for 14% of the embedded processors market and derives only 17% of its revenue from the division. However, the fast expanding embedded market offers significant growth opportunities for the TI, and IoT is the fastest growing sub-segment.

The IoT, which includes all other computing devices apart from PCs, tablets and smartphones, is considered to be the next big driver for the semiconductor industry. Gartner estimates the market will grow almost 30 times, from an installed base of 0.9 billion in 2009 to 26 billion by 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets. [1]

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In the IoT space, minimal power consumption and the lowest possible cost are two key requirements. Microcontrollers (MCUs), which are purpose-dedicated, low-cost logic devices, currently dominate the market for Internet-of-things. TI’s SimpleLink portfolio consists of low power wireless connectivity solutions – wireless MCUs, wireless network processors (WNPs), RF transceivers and range extenders for the broad embedded market – which help develop and connect anything to the IoT. The company claims that its connectivity solutions offer the industry’s lowest power consumption for battery operated devices.

With increased investments in the area over the past few years and new product launches, TI continues to expand its embedded portfolio every quarter. In the last one year, TI expanded its embedded product portfolio by almost 20%. In late 2010-early 2011, TI significantly stepped up its investments in the embedded market in order to accelerate its product introductions. The company continues to invest at a healthy level, though at a lower level compared to the past. The high level of investment and an expanding product portfolio from heavier levels of investment in the prior few years, will continue to drive growth in the future as well.

Our price estimate of $49 for TI is at an approximate 15% discount to the current market price.

See our complete analysis of Texas Instruments here

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Notes:
  1. Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020, Gartner Newsroom, December 12, 2013 []