Among the technologies that are quickly moving to the mainstream are a new, lower power form of Bluetooth along with Wi-Fi Direct, which lets two devices talk to each other over Wi-Fi without the need to first connect through a router. Also moving from the fringes to the mainstream of the smartphone market is support for so-called Near Field Communications, technology that is most noted for allowing mobile payment, but can also provide a quick means of authentication and sharing of other types of data.

“We’re seeing a huge interest for NFC,” Broadcom Senior Vice President Michael Hurlston said on Wednesday, speaking to a group of reporters in San Francisco.

Broadcom, as CEO Scott McGregor told AllThingsD back in February, is also hard at work on chips to power both low-cost Android phones as well as on technology to improve location-based services indoors, where satellite-based approaches work less well.

The sub-$100 phone market is being further fueled by new players like China’s Huawei and ZTE that are building less expensive phones that can be sold under the carrier’s brands. “Android has certainly been something that has leveled the playing field,” Hurlston said. That trend has helped Broadcom grow its business in China, where it had been less of a strong player.

Hurlston noted that more of its business is still at the high-end of the smartphone market, an area where brands like HTC, Motorola and Apple are seeing strong growth. “The high end of the market is still growing like crazy…but that low end seems to be eating a lot into the feature phone and basic voice [phone market] and that’s very good for us as a business.”

Although battery life is a concern for Broadcom, Hurlston said that one of the challenges is that it is not as high on the request list from the wireless carriers, who have a huge role in dictating what goes into the phones, since–especially in the U.S.–they are the ones buying the phones from device makers.

“What they are most interested in are these new features,” Hurlston said.

Wi-Fi Direct, Hurlston said, should become much more common by the end of the year. “We definitely expect to see a large percentage of phones by year end become Wi-Fi Direct enabled.”

NFC and indoor location services should start to take off toward the end of this year and into the first half of next year, he said.

Another thing that is surprisingly low on the feature request list from carriers, Broadcom executives said, is demand for better voice quality, even though new 4G networks could support using some of that extra bandwidth for improved calling. “What we are not seeing is a lot of pull,” Hurlston said.

Today, however, was about the Atom chip, the other chip on which Intel has pinned such hopes yet seen little payoff as yet. The company announced that the latest version of the Atom, known till now under the codename Oak Trail, is available beginning today.

The new chip is about 60 percent smaller, meaning it consumes less power than its predecessor to get the same level of computing work accomplished. Intel says it will be capable of delivering “all day” battery life in tablets and allow for a fanless design in small notebook PCs, meaning those devices will be both cooler and quieter. Intel has also added a feature called Deeper Sleep that conserves power during periods of inactivity.

And as is often the case when Intel debuts a new chip, it also points toward the near horizon. In this case, it’s Cedar Trail, yet another version of the Atom, this one built with a bleeding-edge 32-nanometer manufacturing process, which means all the elements on the chip will be even smaller yet. Intel’s current line of PC processors, the Sandy Bridge generation, is built on the same manufacturing technology. Cedar Trail will not only be smaller, but also will sport such things as a media engine for video playback at full HD resolution of 1080p.

Tablets and smartphones to this point have been another sore spot for Intel, where chips built on the core designs of U.K.-based ARM Holdings tend to hold sway. Intel’s chips have so far suffered from a nagging need to sip precious battery power far less greedily as compared to designs of ARM-based chips from the likes of Broadcom, Qualcomm, Samsung and others.

The new chip will run on tablets running Google’s Chrome and Android operating systems; MeeGo, the smartphone platform that Intel has been working on with Nokia (though its future is in question since Nokia’s decision to embrace Windows); and Microsoft’s Windows.

Meanwhile, Intel still has a lock on the market for traditional PC and server chips, though as we all know, tablets–one in particular–have been causing all kinds of troubles for the players in that end of the market.

But the teardown that Wall Street and the investment community is waiting on is the one from the market research firm IHS iSuppli, whose team spent all day Saturday in a furious effort to dissemble a 32-gigabyte iPad 2 and estimate the cost that Apple paid for every component. They gave me an exclusive early look at their findings.

The point is to form a partial picture of the gross profit margin on every unit, a figure that Apple generally keeps to itself. This information is useful to investors and analysts who then factor the findings in with other assumptions they use to predict how much of a profit Apple is going to report over the next few quarters.

The headline of iSuppli’s teardown researcher is always the estimated bill-of-materials cost, which is the sum cost that it thinks Apple has paid for all the hardware inside the iPad 2. It doesn’t take into account the cost to develop software, or other things like packaging, shipping and distribution, or manufacturing.

In this case the estimates are for the 32-gigabyte, 3G version of the iPad which sells for $729, and there are two estimates, one for the AT&T version–$326.60, and one for the Verizon Wireless version–$323.35. Some of the wireless chips used in the AT&T version are a little more expensive or require an extra part. For example, on the Verizon version, GPS is integrated with the Qualcomm-made wireless baseband chip. On the AT&T version, an extra GPS chip had to be added along with the Broadcom-made Bluteooth and Wi-Fi chips, adding an extra cost of $1.50 per unit.

The baseband wireless chips were naturally different because AT&T and Verizon use different wireless technologies. Intel, the new owner of the former wireless chip division of Infineon, supplied the main wireless chip in the AT&T version, with supporting chips coming from TriQuint Semiconductor and Skyworks for a combined cost of $18.70.

Qualcomm supplied the main wireless chip Verizon version, with supporting chips coming from Skyworks, Avago Technologies, and Murata for a combined cost of $16.35. While there had been some speculation that Apple had used a Qualcomm chip in both versions, but it turned out not to be the case.

Aside from the wireless chips, the components are otherwise identical across both versions. Both sport Apple’s A5 chip, and iSuppli says that Samsung is still manufacturing it for Apple at a cost of $14. While there had been some talk in recent weeks that Apple was moving its chip manufacturing contract to Tawain Semiconductor Manufacturing Corp, there’s no evidence that it has made such a move, at least not yet.

The most expensive component by far is the touch-sensitive display, coming at $127. ISuppli says that the LCD portion the unit they tore apart was built by LG Display, but Apple is known to use other sources for displays, including Samsung, and possibly ChiMei Innolux. The glass assembly covering the display is thought to come from TPK or WinTek. ISuppli says costs on the display are going up because manufacturing yields on LCDs have been lower. Apple is also thought to be using a more expensive glue to improve the efficiency of the process of bonding a new thinner type of Gorilla glass to the display.

Samsung supplied Apple with the NAND flash memory used in the iSuppli sample, holding on to a relationship that goes back several years to the days of the first iPod nano, though Toshiba is also known to supply Apple with flash. It is the world biggest consumer of flash memory, after all. Elpida supplied the DRAM memory. ISuppli estimates the combined cost of memory, both flash and DRAM plus a Micron-made MCP memory chip at $65.70.

Then there’s a set of components seen in the iPad 1 that remained the same in the iPad 2. STMicroelectronics supplied the gyroscope and the accelerometer, and AKM Semiconductor supplied the electronic compass. Broadcom supplied touch interface chips, while Texas Instruments supplied a touch screen driver chip. Analog Devices supplied a capacitive touch controller.

Finally there are the two cameras. ISuppli hasn’t yet named the suppliers there, though the usual candidate is Aptina, the former camera unit of Micron, though it’s possible that Apple sources them from more than one place.

ISuppli’s estimates are a lot higher than the findings of another teardown shop, UBM Techinsights. The Wall Street Journal reported that UBM’s cost estimate is about $270, but that estimate was made before it conducted its actual teardown, and didn’t change once it had.

Just at this week’s Mobile World Congress alone, the company announced plans for a whole range of new chips, including a processor that the company said should help Google in its goal of driving Android down into lower price points.

“The chips we’ve announced allow for Android phones to cover the gamut,” McGregor told Mobilized. While rivals such as Nvidia and Qualcomm plan ever more powerful chips for the high end of the phone and tablet markets, Broadcom is looking to crack into the Android processor market by driving down cost.

The key, he said, is that its processors, while perhaps not yet competitive at the ultra-high end of the smartphone market, integrate more functions than do rival chips. More stuff on a single chip means lower prices, and with Broadcom’s latest chip, Android devices should be able to stretch all the way down to the middle of the feature phone market.

Touring the company’s booth, McGregor pointed to a number of other interesting projects the company has going on in the wireless realm. For instance, the company is working on chips that expand the potential for location-based services by tapping more types of satellites. While GPS uses only American whirlybirds, data is also available now from Russian, Japanese and European satellites. The company is also working on technologies to improve location data inside buildings where satellites typically are of no help.

Another interesting area is in tablets. While much of the attention is on the iPad or its would-be rivals, McGregor said there is an emerging market for lower-end home units that can be given away by service providers like Comcast as another screen for users to consume content. While free tablets haven’t hit the U.S., McGregor said British Telecom and Japan’s NTT DoCoMo are among those offering such products.

Shares in ARM have nearly tripled in value from this time a year ago, and the most recent surge occurred in December, when the first reports emerged that Microsoft would do something that previously seemed almost unthinkable: Create a version of Windows designed to run on chips other than the x86 chips from Intel and Advanced Micro Devices. Microsoft confirmed the news two days ago. If 2011 is going to be the year of the tablet, then chances are it’s going to be the year of ARM chips.

The funny thing is, practically every year has been a good year for ARM chips. They’re so widely used already that there’s a good chance you use them, probably several of them, every day. During its most recent quarter, more than 900 million ARM-based chips were sold in mobile devices like smartphones and tablets, while another 600 million were used in devices as varied as TV, toys, cars, alarm clocks and remote controls.

ARM doesn’t build the chips itself; it designs the cores–or central brains–used on those chips. I like to compare it to selling a basic cake recipe. If you’re a baker whose expertise is making really great frosting, why bother dreaming up a brand-new cake recipe when you can use an existing one, and instead use your time and effort to make great frosting? A lot of semiconductor and electronics companies have reached the same conclusion, and paid to license ARM’s recipes for chips, and then built their own custom enhancements around the ARM core.

It’s a pretty popular recipe. The company issued more than 700 licenses as of last year to some 250 chip companies, which then turned around and sold the chips to more than 1,000 manufacturers. ARM estimates that in 2009 four billion chips based on its designs were sold, and that more than 20 billion have been sold in the two decades since the company launched.

Aside from the three ARM-based chips from Texas Instruments, Nvidia and Qualcomm that Microsoft demonstrated running Windows as part of CEO Steve Ballmer’s Jan. 5 keynote presentation at CES, the list of companies using ARM includes Samsung, Broadcom, Toshiba and scores of smaller chip companies.

ARM also has an interesting history. It was founded as a joint venture between Apple and a British outfit called Acorn Computers in 1990. Apple’s interest was to create and develop a chip that would run the Newton, and spur the development of a new-age handheld computer that the Newton was supposed to bring about. (As a few commenters note below, the first ARM chips were used in desktop computers sold primarily in the U.K.) The Newton went nowhere, but the vision for ARM as the chip of choice for mobile computing was right on the money. ARM chips from Motorola (now Freescale) landed in devices from Palm and early handhelds running Windows Mobile. ARM flourished and went public on the London Stock Exchange in 1998. Between 1998 and 2004, Apple sold off its ARM shares for combined proceeds of almost $800 million.

Now having built a considerable lead in the wireless world, ARM-based chips look awfully strong as the battle over tablets shapes up. And beyond that lies higher-end computing opportunities like servers. Some think Intel should be worried. Despite this week’s launch of its Sandy Bridge generation of PC processors, Intel’s shares are trading lower today than they did at the start of the week.

I caught up briefly with ARM Executive Vice President Antonio Viana by phone from CES to talk about the year ahead for ARM.

There’s been a lot of attention around ARM coming into the Windows fold, and everyone knows it from its strength in the wireless devices. How is 2011 shaping up for ARM?

We got our start more than 20 years introducing a chip architecture aimed primarily at the mobile industry. We offered a chip design that’s efficient in the way it consumes power. What happened was the technology moved beyond the cellphone: Into the home, cars, printers. And that trend is continuing. Consumers want features that require a lot more computing power. Some of these devices are handhelds, some aren’t. What makes the ARM architecture central to all that is that industry brings their own secret sauce, their own pieces to the table. The development with Microsoft is just a small microcosm of that.

Are there new licensees coming on?

Our roadmap is constantly evolving, and we’ve developed the architecture for a pretty broad set of use cases. We license to companies like NXP that are relatively simple 8- and 16-bit microcontroller chips that go into industrial equipment, or meters or toys. But because of the network connectivity requirements that are starting to come to those devices, you’re starting to see some of these move to more versatile 32-bit chips and the costs are manageable because developers are so used to working with ARM. Then if you swing way out to the other extreme we just launched our A15 architecture. That’s a multicore design, and it’s finding its way into next-generation servers.

Who’s using that?

Unfortunately, we can’t say yet. A15 was announced last year. We think we’ll start seeing production silicon in the latter half of next year, and there will be samples before that. When you start seeing samples then the partners working with it will start announcing products.

Obviously Intel has its Atom processor, which it has aimed at tablets and handhelds and many other market segments you’re involved in. What kind of competitive threat do you see from Intel?

The competitive threat is certainly there–x86 is incredibly robust and it has the incredible capital resources of Intel behind it. ‘Nuff said. Intel will be successful in various markets they go after. We’d be fools not to acknowledge that. But the question is who’s going to grow more? Who is going to leverage off the market trends right now? Tablets are a wonderful example of that. Right now about 90 percent of all tablets in the marketplace are ARM-powered. At a show like CES you see a lot of things that indicate the market trends. You always have to take a step back and wonder which of the things you see may never happen. But the trends are usually accurate. One of those trends is for always-on, always-connected power-efficient devices. When you look at it that way I’m pretty comfortable with ARM’s position.

Rambus, whose nominal specialty is designing ways for chips to pass data back and forth but which is better known for more than a decade of bitter legal battles, earlier this month filed a complaint with the ITC, saying that products from several companies contained chips that infringe on its patents.

As anyone who’s been paying attention to the numerous patent battles around smartphones knows, the ITC is generally seen as a fast track to a settlement of a patent dispute. Since federal courts are slow and litigation is expensive, companies often go to the ITC ostensibly to block the import of products found to infringe on patents. Since practically every technology product is built outside the U.S., sales of an infringing product can be subject to an exclusion order, the usual outcome when a violation is found.

What’s interesting is the wide range of companies that Rambus has named in its complaint: Hewlett-Packard, Cisco Systems, Nvidia, Broadcom, Seagate, Motorola, Garmin, Asus and Hitachi are among the better known ones. The full list contains 34 companies, including some subsidiaries.

Some of the patents involved in this complaint were the subject of a prior case that Rambus took to the ITC against Nvidia. The commission ruled the patents–known as the Barth family of patents–were valid and issued an exclusion order, prompting Nvidia to come to the table and sign a licensing agreement in August. Rambus is obviously looking for a similar outcome from Broadcom and Freescale, which it says are among those now infringing on the Barth patents.

Additionally there’s another set of patents known as the Dally family, which Rambus didn’t invent but to which it holds a license. The patents are owned by MIT and are based on the work of Bill Dally, a former MIT professor of electrical engineering who’s now at Stanford University. The patents had been licensed exclusively to a small private firm called Velio Communications, where Dally had been CTO and which was acquired by the chip maker LSI Logic in March of 2004.

In a twist that could happen only in the strange world that is patent law, Rambus acquired the exclusive license to Velio’s serial interface patents–the Dally family–in a separate deal in the waning months of 2003. The irony is that LSI is among those being sued for infringing on the Dally patents. Some M&A lawyers at LSI must be kicking themselves today.

Secrets about tech companies are a major feature of the insider trading charges unveiled so far. Companies including AMD, Dell, Research in Motion, Marvell, Western Digital, Taiwan Semiconductor, Sierra Wireless and Broadcom allegedly had secrets leaked about them — including revenue and sales forecasts.

The alleged secrets passed about Apple products and product sales came courtesy of a business development official at Flextronics, Walter Shimoon, according to the government’s legal complaint released today. The government said Flextronics had business dealings with Apple, including supplying parts such as the camera and charger components for the iPhone and iPod.

Shimoon, according to the insider-trading charges, gave an unnamed government witness a secretive chat about a brand new Apple device in the works. The conversation took place in Oct 2009, nearly four months before the introduction of the iPad.

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• Intel: Caso cuts his rating to Neutral from Positive based on checks that find a weakening PC environment leading into Q3. “The secular elements of our INTC thesis remain intact, but we believe estimates need to come down, and are hesitant to continue recommending the stock ahead of estimate cuts,” he writes. Caso thinks we could be beaded for the worst Q3 for notebooks since 2001.
• Broadcom: Caso moves his rating to Neutral from Positive. He writes in a research note that checks find “a broader slowdown in end-market demand.” Caso says his primary areas of concerns are not a large percentage of the company’s revenue, we nonetheless thinks a slowdown will make it tough for the stock to outperform until demand issues are resolved. In particular, he has concerns about demand in the PC, consumer electronics and Nokia (NOK) handset markets.

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“We believe various news articles and competitor notes calling for a build delay were just false alarms,” he writes. The company, of course, has now set an April 3 launch for Wi-Fi versions of the iPad, with 3G versions to ship toward the end of April. Berger, who tracks the chip industry, thinks many iPhone component suppliers will also sell into the iPad, including Infineon (IFX), Skyworks (SKWS), Triquint (TQNT), Broadcom (BRCM) and Texas Instruments (TXN). Production in the 4-5 million unit range would “drive some material revenues” for these companies, he says, “particularly BRCM.”

Meanwhiile, Berger has revised his estimates on iPod, iPhone, notebook and desktop builds.

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Note: Broadcom has the confusing habit of reporting only GAAP profits, while the Street tracks non-GAAP results. This made it look like the company suffered a huge earnings miss in the quarter, although this turns out not to be the case. Read on.

For the quarter, the company reported revenue of $1.254 billion, up 20.6 percent from the second quarter, down 3.4 percent from a year ago, and ahead of the Street at $1.16 billion.

GAAP EPS was 16 cents a share, which a Broadcom spokesman notes is above the Street at 11 cents. On a non-GAAP basis–a number not in the release–the company earned 40 cents, beating the Street consensus at 33 cents.

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A note from JMP Research’s Alax Gauna sums up the bear case for the stock. Gauna writes today that Broadcom’s beat was aided by a $65.3 million payment from Qualcomm (QCOM) as a result of a settlement reached between the two back in April.

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Snyder says the part had been delayed by a “noise issue” that now appears to be corrected. Snyder says the total EDGE market could be in the $200 million to $250 million range; he says the low-cost portion targeted by Broadcom will be just a small fraction of the market, but that successful deployment of the EDGE SOC “would ensure Broadcom’s position in the top echelon of baseband providers.”

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Continuing, Folino accuses Broadcom of engineering its bid to commandeer new contracts that Emulex recently won at the expense of its rivals–including Broadcom.

“Your unsolicited proposal is opportunistic given Broadcom is uniquely aware of the new unannounced design wins that Emulex has secured with tier-one OEMs at the expense of Broadcom and other competitors,” Folino writes. “As you know, these design wins are kept confidential at our customers’ request and do not typically begin contributing revenue for several quarters. Thus, Emulex’s stock price does not fully reflect the long-term value creation potential that the Company has already secured. However, given that some of these design wins have come at your expense, including your core Ethernet networking business, you are uniquely aware of the future value we have secured and how well positioned we are to unseat you on many other platforms in the near future. We believe your proposal is an opportunistic attempt to capture that value, which rightly belongs to our stockholders.”

In other words, quit low-balling us–especially if, as you profess, you’d like to move ahead with a deal in a “friendly, collaborative manner.”

The two companies agreed not to assert patents against each other; Broadcom also agreed not to sue Qualcomm’s customers over products that include Qualcomm chips in cellular prodocuts.

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Broadcom says that it believes “its leadership in Ethernet networking, together with Emulex’s deeper expertise in Fibre Channel storage networking, will enable the combined company to accelerate the development of converged solutions for enterprise networks.”

Broadcom says it believes the deal would be accretive in 2010. The deal would be funded by cash and securities on hand.

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Also making the rounds today are reports claiming iPhone 3.0 will support on-board video editing. Seems there are some resources in the latest beta of the OS suggesting that video capture and manipulation will figure large in the next device–things like “UIMovie Scrubber Editing Right,” “UIMovieScrubberMaskLeft” and whatnot. Now, while these resources could be pointing to something else entirely, it seems plausible that they are referencing some sort of video tool (iMovie Mobile? iMovie Light? iMoviePhone?)–particularly when considered with the MobileMe “Publish Video” feature also found concealed in the 3.0 beta. That said, no mention of video editing was made during Apple’s recent iPhone 3.0 event. Perhaps Apple (AAPL) hopes to keep it under wraps until the device’s official debut. Or perhaps there’s nothing to keep under wraps in the first place.

Broadcom, like many chip companies at the show, was displaying its wares in a private display area. But on Friday afternoon the spacious booth was bustling with visitors. Broadcom had some interesting technologies on display:

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Fairchild (FCS) reduced its guidance as well. It had been expecting $338 million to $360 million in sales for its fiscal fourth quarter. Now it expects just $320 million.

Fairchild is the latest semiconductor company to temper its estimates as demand for the computers and telecommunications gear in which its chips are used contracts. Earlier this week, Texas Instruments (TXN), National Semi (NSM) and Broadcom (BRCM) all cut their projections because of lousy market conditions.

Fairchild (FCS) reduced its guidance as well. It had been expecting $338 million to $360 million in sales for its fiscal fourth quarter. Now it expects just $320 million.

Fairchild is the latest semiconductor company to temper its estimates as demand for the computers and telecommunications gear in which its chips are used contracts. Earlier this week, Texas Instruments (TXN), National Semi (NSM) and Broadcom (BRCM) all cut their projections because of lousy market conditions.