Moor Insights & Strategy Two-Week update Ending August 5, 2022

I hope you all had a great couple of weeks

Last week, I visited IBM Research facilities in Yorktown and Albany.  Anshel attended the OnePlus 10T Launch in NYC.  Steve attended the Flash Memory Summit.  At the end of July, I attended Zoho Days in Austin.  Will traveled to Boston to attend AWS re:Inforce.

Over the last few weeks, our MI&S team published 40 deliverables: 

The press quoted us with 26 citations. Journalists wanted to hear about 3G, AMD, ASUS, Broadcom, Cisco, Chips, Discover, Facebook, Fintech, Google, Intel, Meta, Micron, NVIDIA, PC, and Qualcomm. 

Last week’s MIS Quick Insights:

A.I./Machine Learning (Paul Smith-Goodson)

  • IBM Research just released its comprehensive AI and platform-based edge research strategy anchored by its numerous enterprise partnerships & use cases. It is a complete edge ecosystem. IBM’s architecture will provide the edge with autonomy to determine where data should reside and from where the control plane should be exercised. IBM foresees this architecture evolving into a decentralized model capable of edge-to-edge interactions.

AR/VR (Anshel Sag)

  • The FTC has filed a lawsuit against Meta, alleging that its acquisition of Within, the parent company of the Supernatural VR fitness app, is anti-competitive as it already owns a fitness app in Beatsaber. I believe that the FTC’s lawsuit is misguided and too early even to establish a market that would even cause harm to consumers. I also think that the losing bidder in the Supernatural acquisition may be a significant contributor to the lawsuit’s filing since the acquisition was announced in October of last year, and the timing and overall language of the suit are very odd.

Carrier/Wireless 

  • The Circuit of the Americas (COTA) is deploying a private 5G network, but it will likely not be ready for the next Formula 1 Grand Prix to be held in Austin in October. My personal experience at the event in 2021 was fraught with cellular connectivity issues that affected the race venue’s ticketing system, concessions, and app – all relying on public mobile network connectivity. I hope that in deploying a 5G private network, COTA can address past issues and provide a much better and richer fan experience with mixed reality activations and the ability to order a beer on time! One of 5G’s “superpowers” is also a massive improvement over LTE in the number of devices that can be supported, which should go far to service the large fan base.             

Datacenter: 

  • Storage- (Steve McDowell) 
    • N/A 
  • Networking- (Will Townsend) 
    • HPE Aruba recently made several enhancements to its ESP AIOps platform. To date, AI is used to ensure proactive remediation of networking issues. What I find compelling about Aruba’s recent announcement is that the company is leaning into AI to optimize performance and bolster cybersecurity. It is a wise move given the AI whitewashing among networking infrastructure providers.   
  • Server- (Matt Kimball)   
    • It’s been an interesting couple of weeks during this earnings season for the chip companies. From a datacenter perspective, Intel comes in well below, and AMD far exceeds.  Intel Datacenter and AI group (DCAI) rev down 16% ($4.6B). Operating income decline of 90% ($200M – $2.1B in Q2FY21). Operating margin drops from 38% to 5%. Guidance for the remainder of 2022 is not strong. 
      • AMD Datacenter rev up 83% ($1.5).  Operating income doubles to $472M ($204M in Q2FY21). Embedded, driven by Xilinx, revenue increases by 2200% to 1.3B, with operating income increase of over 10,000% to $641M. The 83% in DC is largely fueled by EPYC (Xilinx was a minor contribution to this growth). Cloud adoption continues to accelerate. Enterprise adoption continues to trail. 
      • I believe EPYC market share numbers have eclipsed Opteron at its peak (25%).  And there’s no “Barcelona” on the horizon to change the company’s fortunes.
      • More worrying for the competition is this – AMD has diversified its datacenter portfolio to support a wider swath of the market’s computational needs with the addition of Xilinx and Pensando. Unlike the company’s 2006 and 2012 acquisitions of ATI and Sea Micro, respectively, these additions to the portfolio will deliver a short-term boost and set up the company in a position of strength long term. 
      • Here’s what we’ve known: the chip game is as much about execution as it is about features and performance. It took AMD about ten years to get this execution engine running. Intel? The clock is running.
      • One concern I have for AMD is its lagging adoption in enterprise. On the earnings call, CEO Lisa Su mentioned enterprise adoption of EPYC is taking a “little longer” than expected due to enterprise IT buying cycles. It’s been over five years since EPYC launched. The conservative adoption cycle of enterprise IT can’t be used as a reason for slow adoption. The company should drive sell-through activities with its OEM and channel partners. As cloud customers have no allegiance, diversity of revenue is critical for EPYC growth and success. 
    • A real threat that both AMD and Intel need to track is the adoption of Arm in the cloud. Every major cloud provider in the US has a rich Arm offering. These instances are showing considerable price-performance advantages. And the Arm silicon ecosystem can quickly drive innovative and customized designs to meet the market’s needs (thank you, Neoverse). The cloud providers have already validated Arm as a legitimate compute platform for many of the workloads enterprise IT runs.  And we have seen aggressive positioning of Arm-based cloud instances targeting customers across all segments and all verticals.  NVIDIA has further validated Arm with Grace, and HPE announced the first mainstream OEM platform with the RL300. 
    • We’ve been saying it for the last couple of years – Arm in the datacenter – and it’s here to stay.

FinTech (Melody Brue)

  • N/A

IIoT and IoT (Bill Curtis)

  • N/A

Personal Computing/ Collaboration (Anshel Sag) 

  • Verizon’s earnings indicate a considerable struggle to keep up with AT&T and T-Mobile’s 5G buildouts, which have benefitted them greatly. T-Mobile has guided up their subscriber numbers, and AT&T gained the most subscribers it has ever had in years. 5G leadership matters.  Bank of America recently downgraded Verizon’s stock.
  • Meta announced a $100 price increase to the Quest 2 and later announced earnings that showed the company’s first shrinkage in revenue in the company’s history. I believe the increase reflects increased costs and the lessened ability of Meta’s Facebook and Instagram revenues to buoy the Reality Labs division until it becomes profitable.
  • India’s first 5G auction has completed, raising $18 billion, which I believe will set the stage for 5G launches from major carriers like Reliance Jio in the fall, finally opening the market to 5G device and infrastructure sales for the industry, a sorely missed opportunity for the 2nd largest wireless market in the world.
  • Qualcomm announced earnings and showed impressive results across the board, but also guided earnings would likely be down next quarter due to economic contractions globally. In addition, Qualcomm also announced an extension and a deepening of its relationship with Samsung, which will now include PC and XR chips as well as future 6G IP licenses. Samsung became the third company to sign an XR chip agreement with Qualcomm, following Microsoft and ByteDance/Pico earlier this year.
  • SpaceX continues to fight Dish’s plans to use 12GHz for 5G and says it will be “hugely detrimental” to millions of Starlink and other satellite users.
  • T-Mobile has announced the next generation of its 5G REVVL devices with the REVVL 6 and REVVL 6 Pro phones, both utilizing MediaTek’s Dimensity 700 chipset
  • The passage of the CHIPS Act will bring a $52 billion boost to the US domestic chip industry and, I believe, will help spur competition, as long as the funds are more targeted and don’t simply go to the biggest existing foundries in the US, like Intel. 
  • Are Verizon and T-Mobile taking a chunk out of Comcast? Comcast’s broadband business stopped growing for the first time. This, paired with the GSA, saying that FWA 5G is growing at a crazy pace, with 5G CPE shipments growing 162% or to 3 million in 2021 and are forecasted to double again to 7.6 million in 2022.

Quantum Computing (Paul Smith-Goodson)

  • D-Wave will officially begin trading on the NYSE on August 8. It will trade under the ticker symbols “QBTS” and “QBTS WS,” respectively.  DPCM Capital’s shares of common stock, units, and warrants have been delisted from the NYSE. D-Wave offers quantum annealing, and it is working on a gate-model quantum computer. In June of this year, it launched an experimental prototype of its 6th gen machine called Advantage2. 
  • Quantinuum published a paper on its demonstration of fault-tolerance of two entangled logical qubits using real-time error correction. It is a positive step towards developing error correction that will allow the construction of quantum computers with large numbers of qubits.

Retail Tech (Melody Brue)

  • N/A

Security (Will Townsend)

  • Zscaler saw its stock value take a hit recently, with one financial analyst downgrading the longer-term outlook for the company. From my perspective, the analysis was solely based on net profitability and ignored the continued gains in top-line revenue and customer acquisition. Zscaler continues to offer one of the most complete, end-to-end zero trust platforms in the industry, which should position the company well into the foreseeable future.           

Space (Paul Smith-Goodson)

  • N/A   

Columns Published (Forbes, eWEEK, UPLOAD VR, and others

  1. Amazon Increased Output In 2021 Orders Of Magnitude More Than Carbon Emissions, by Patrick Moorhead
  2. Micron Proving Its NAND Leadership By Shipping World’s First 232-Layer Device, by Patrick Moorhead
  3. Quantinuum Makes A Significant Quantum Computing Breakthrough By Connecting The Dots Of Its Previous Research, by Paul Smith-Goodson
  4. New Oracle Database Platforms And Services Deliver Outstanding Cloud Benefits, by Steve McDowell
  5. Review: HP’s Omen 45L Desktop Is A Refreshing Desktop From A Major OEM, by Anshel Sag
  6. Google Cloud Platform Deploys Arm – Here’s What You Should Know, by Matt Kimball

Blogs Published (MI&S)                                                              

  1. Amazon Continues To Focus On Ambient Computing At Alexa Live, by Patrick Moorhead
  2. Amazon Announces ‘Fleet Edge’ Technology To Improve Safety For Delivery Drivers, by Patrick Moorhead
  3. Alienware Launches AMD Advantage M17 R5 With Impressive 480Hz Panel, by Patrick Moorhead
  4. Cloudera And Apache Iceberg – Collaborating On The Same Data, by Patrick Moorhead
  5. Vodafone – The Journey From ‘Telco To TechCo’ With Help From Oracle Cloud, by Patrick Moorhead
  6. Hands-On With The First Snapdragon Spaces AR Game: Motorola’s ‘Play Like A Padre’, by Anshel Sag
  7. Arm’s New CPU And GPU Cores Usher A New Generation Of Total Compute Solutions, by Anshel Sag
  8. IBM Expands Its Power10 Portfolio For Mission Critical Applications, by Matt Kimball
  9. HPE’s Transformation Was On Full Display At Discover 2022, by Matt Kimball
  10. Google Dethrones NVIDIA With Split Results In Latest Artificial Intelligence Benchmarking Tests, by Paul Smith-Goodson

Research Paper(s):

  • N/A

Podcasts:

The G2 on 5G by Moor Insights & Strategy, with Anshel Sag and Will Townsend

  1. The G2 on 5G Podcast – Dish Launches Boost Infinite, Dish Might Walk From 800 MHz Spectrum & More
  2. The G2 on 5G Podcast – ExteNet Private 5G at CoTA, India 5G Auction Results, NTT and Intel Help BMW

DataCentric Podcast by Moor Insights & Strategywith Matt Kimball and Steve McDowell

  •  N/A

The Six-Five Podcast by Moor Insights & Strategy and Futurum Research, with Patrick Moorhead and Daniel Newman

  1. Ep133: We are LIVE! Talking AMD, Zoho, Micron, Lattice, Pelosi Taiwan Visit, and Amazon
  2. Replay: Splunk’s Gary Steele on a Data-centric Strategy for Security Teams
  3. Replay: @Microsoft’s @Panos_Panay on Product Making, Inclusive Design, and more
  4. Six Five On the Road at Dell Headquarters with Patrick Mooney
  5. Replay: IBM Research’s Jay Gambetta on the Future of Quantum
  6. Replay: Luminar’s Austin Russell on the future of LiDAR for electric cars
  7. Ep132: Talking Tech Earnings for Microsoft, Google, AWS, Qualcomm, Intel, and Honeywell
  8. Replay: Intel Foundry Pres. Dr. Randhir Thakur on driving the next era of computing
  9. Replay: SAP CMSO Julia White on tech, data, & sustainability in business
  10. Replay: Intel Graphics EVP & GM Raja Koduri on powering the metaverse
  11. Replay: Qualcomm CFO Akash Palkhiwala on accelerating the digital future

Moor Insights & Strategy Podcast

Press Citations: 

  1. 3G / CNET https://www.cnet.com/tech/mobile/3g-service-is-going-extinct-we-asked-t-mobile-verizon-and-sprint-what-theyre-doing-about-it/ (Anshel Sag)
  2. AMD / Siliconangle https://siliconangle.com/2022/08/02/amd-delivers-record-quarterly-revenue-stock-falls-weak-guidance/
  3. AMD, Intel / CNBC https://www.cnbc.com/video/2022/08/03/moorhead-its-essentially-a-two-horse-race-between-amd-and-intel.html
  4. ASUS, NZXT / WCCTech https://wccftech.com/asus-nzxt-join-list-of-companies-laying-off-employees-during-inflation/ (Anshel Sag)
  5. Broadcom / HoustonChronicle https://www.houstonchronicle.com/business/article/Silverman-How-a-proposed-FCC-standard-maybe-17319929.php (Will Townsend)
  6. Cisco / RCRWireless https://www.rcrwireless.com/20220804/business/cisco-reorganizing-business-groups-as-exec-plans-exit (Will Townsend)
  7. Chips / Austin American Statesmen https://www.statesman.com/restricted/?return=https%3A%2F%2Fwww.statesman.com%2Fstory%2Fbusiness%2Ftechnology%2F2022%2F07%2F29%2Faustin-tech-chip-act-america-competes-senate-tech%2F65385986007%2F
  8. Chip / Gametiptip https://gametiptip.com/biden-seeks-37b-to-accelerate-chip-production-amid-ps5-xbox-shortage/
  9. Discover / DHL https://www.dhl.com/discover/en-au/business/productivity/5g-and-logistics (Will Townsend)
  10. Facebook / CNET https://www.cnet.com/tech/computing/the-low-cost-vr-honeymoon-is-over/ (Anshel Sag)
  11. Fintech / Cutoday.info https://www.cutoday.info/site/Fresh-Today/Start-Up-Fintech-Offering-Cash-Advances-So-Workers-Can-Fund-401-k-s (Melody Brue)
  12. Google / AndroidCentral https://www.androidcentral.com/apps-software/time-is-ticking-for-google-to-catch-up-to-tiktok (Anshel Sag)
  13. Intel / Marketwatch https://www.marketwatch.com/story/which-intel-ceo-is-to-blame-for-the-current-woes-or-is-it-actually-amds-ceo-11659059247
  14. Intel / SiliconAngle https://siliconangle.com/2022/07/28/intels-stock-falls-earnings-miss-lower-guidance-ceo-admits-results-standards/
  15. Intel / Tweaktown https://www.tweaktown.com/news/87664/intel-q2-2022-disastrous-as-amd-keeps-kicking-their-ass-big-time/index.html
  16. Intel / Arstechnica https://arstechnica.com/tech-policy/2022/08/chipmakers-battle-for-slice-of-us-government-support/
  17. Intel / EDN https://www.edn.com/intel-trouble-in-the-idm-2-0-paradise/
  18. Meta / AndroidCentral https://www.androidcentral.com/gaming/virtual-reality/the-real-problem-with-meta-vr-monopoly-wont-be-solved-by-ftc-suit (Anshel Sag)
  19. Meta / Wired.com https://www.wired.com/story/meta-vr-headsets-price-hike/ (Anshel Sag)
  20. Meta / CNET https://www.cnet.com/tech/computing/the-low-cost-vr-honeymoon-is-over/ (Anshel Sag)
  21. Micron / Theregister https://www.theregister.com/2022/07/27/micron_232layer_nand/
  22. NVIDIA, AI / CIO https://www.cio.com/article/404262/the-right-stuff-the-role-of-mlops-in-ai-success.html?utm_source=idg&utm_medium=module&utm_content=from_advertisers
  23. PC / Meterpreter.org https://meterpreter.org/pc-hardware-makers-begin-laying-off-staff-due-to-inflation-and-an-uncertain-economic-outlook/ (Anshel Sag)
  24. Qualcomm / Seekingalpha https://seekingalpha.com/article/4528351-qualcomm-leading-the-pack-in-wi-fi-7 (Anshel Sag)
  25. Qualcomm / AOL https://www.aol.com/stocks-5-top-hours-movers-222148684.html
  26. Qualcomm / Yahoo Finance https://finance.yahoo.com/news/stocks-5-top-after-hours-movers-on-yahoo-finance-222148509.html 

Company:

  • N/A

New Gear or Software We are Using and Testing that is Public Knowledge 

  • HP Omen 45L Desktop 
  • HP Omen 27c Gaming Monitor 
  • Lumina webcam
  • MSI Creator 15 OLED Laptop
  • Microsoft Surface Go 3 with LTE
  • Samsung S22 Ultra and S22
  • RedMagic 7S Pro

Events MI&S Plans on Attending In-Person or Virtually (New) 

  • August
    • Advisory, Seattle, August 16-17 (Patrick Moorhead)
    • Hot Chips, Aug 21-23, virtual (Steve McDowell)
    • VMware Explore, San Francisco, Aug 29-Sept 1 (Matt Kimball, Steve McDowell, Will Townsend)
  • September
    • Quantum Open House Event, TBD (Paul Smith-Goodson)
    • Intel Innovation, San Jose, Sept 27-28 (Matt Kimball, Steve McDowell)
    • SNIA Storage Developer Conference, San Jose, Sept 28-29 (Steve McDowell)
    • MWC Americas – Las Vegas, September 29-30 (Will Townsend)
  • October
    • Google Cloud Next, October 11-13 (Patrick Moorhead)
    • Oracle Cloud World, Las Vegas, October 16 (Matt Kimball, Patrick Moorhead, Steve McDowell)
    • Open Compute Global Summit, October 18-20 (Matt Kimball, Steve McDowell)
    • 5G Americas Analyst Forum – Dallas, October 19-20 (Anshel Sag, Will Townsend)
    • Austin GP, Austin, October 21 (Patrick Moorhead)
    • Advisory, NYC, October 24-27 (Patrick Moorhead)
  • November
    • AWS re:Invent, Las Vegas (Patrick Moorhead)
    • Total Telecom Congress – London, November 1-2 (Will Townsend)
    • 5G Techritory – Riga, November 29-December 1 (Will Townsend)
  • December
    • Palo Alto Ignite – Las Vegas, December 12-15 (Will Townsend)
  • January
    • CES 2022, Las Vegas, January 5-7 (Patrick Moorhead)

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The Team 

Analysts, Analysts In-Residence, Contributors

  1. Patrick Moorhead, Founder, CEO, Chief Analyst; Broad technology coverage plus deep insights into Cloud & SaaS, Personal Computing, Semiconductors, Automotive 
  2. Bill Curtis, Analyst In-Residence, IIoT, and Deep IoT Technology 
  3. Matt Kimball, Principal Analyst, Datacenter Servers, CI, and HCI 
  4. Melody Brue, Principal Analyst, Financial Tech
  5. Steve McDowell, Principal Analyst, Datacenter Storage, and Storage Technologies 
  6. Anshel Sag, Principal Analyst; V.R., P.C. Gaming, Mobile Platforms 
  7. Paul Smith-Goodson, Principal Analyst; Machine Learning, A.I. and Quantum Computing 
  8. Will Townsend, Principal Analyst; Security, Carrier Services, Networking 
  9. Chris Wilder, Contributor, Security 

Operations 

  1. Dan Pickens, Business Director 
  2. Paula Moorhead, Marketing Director, Website, and Social Media 
  3. Walker Pickens, Media Relations, and Writer 
  4. Zane Pickett, Office Manager, AP, AR, travel, writer 
  5. Lee LeClercq Williams, Business Associate 
  6. Nigel Church, Business Associate, Writer, Editor
  7. Jacob Freyman, Writer, and Researcher 
  8. Connor Kenyon, Six Five Sales & Business Development