Instead, the company hopes to find a stickier and more stable customer in automotive and industrial applications.
The OMAP line struggled to find its mobile identity.
TI carved out slots in Amazon's Kindle Fire and Fire HD and Barnes & Noble's Nook. But it probably accomplished the feat with sizable margin busting price concessions.
Beyond those two devices TI failed to gain the same level of traction among tablets and smart phones as Qualcomm's Snapdragon or Nvidia's Tegra.
That put TI in a tough position. It could either press on in hope of out-engineering these rivals or pivot its market focus entirely.
In choosing the latter, TI effectively concedes it can't out-compete its rivals in a market likely to become commoditized over time. In short, the company recognized its future in mobile was at the margin un-friendly low end.
Qualcomm and Nvidia's market opportunity.
Both Amazon and Barnes & Noble are cagey about Kindle and Nook sales figures. But, IDC estimates put Amazon's Kindle sales at 1.2 million units in Q2. The Nook likely sold far fewer, failing to break into the top 5 last quarter.
IDC forecasts there will be 1.4 billion connected devices worldwide next year, growing to 2 billion by 2016. Tablets are likely to see the fastest growth, reaching 13% of all such devices shipped, up from 10% today. While Amazon and the Nook control 5% or less of tablet market share, we're still talking about millions of units.
You can bet the folks at both Amazon and Barnes and Noble will be evaluating their options for the next build cycle. Despite TI's assurances it will continue to support existing customers, these two players are unlikely to continue to build around the OMAP given an uncertain future.
Both Amazon and Barnes & Noble sell the devices to make money from content, rather than the device themselves. As a result, they're very price conscious with vendors.
That isn't exactly Qualcomm's or Nvidia's focus. They've been busy building the next generation of high end solutions instead.
Given their tight fisted focus on pricing, its unlikely Amazon, or the soon-to-spun-off Nook will integrate the latest and greatest chips. Instead, they're more likely to buy previous generations where they can have more negotiating power.
The elephant in the room.
Clearly, the mobile market has been coalescing around a few key vendors, just as consumers have been whittling down OEM's from who they're willing to buy devices.
Apple (AAPL) continues to develop its own processor, which Samsung (SSNLF.PK) continues to manufacture - for now at least. And, Samsung powers a number of its devices with its own homegrown Exynos - although Snapdragon has made appearances in the Galaxy.
With Apple and Samsung controlling so much of the end user market, TI clearly believed there just wasn't enough pie to go around. Especially, given Intel (INTC) continues to develop its own processors too.
In the end, both Qualcomm and Nvidia would welcome the operating leverage from higher unit sales, even if it does mean some margin erosion.
This would mean investors taking advantage of post-launch euphoria to unload shares in mobile suppliers and hanging tough through the next order cycle. It may also mean it's a good time for those who've been watching Qualcomm and Nvidia to buy.
As for TI, they'll be operating for a while under the cloak of uncertainty, which means shareholders may have to find themselves content with their dividends while they wait for the strategy to bear fruit.
Disclosure: I am long QCOM.