Without "Intel Inside"
Somnath is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Its not always "Intel inside."
There are others who are inside the mobile handset and tablets available in the world. There has been very active movement on behalf of Intel to capture the market which is predominantly been influenced by ARM (NASDAQ: ARMH).
Intel (NASDAQ: INTC) has been making efforts to tap the mobile handset processor market. The company still has a long way to go to catch up with ARM in terms of power consumption, according to Noel Hurley, vice president for Marketing & Strategy, Processor Division, ARM.
A comparison between the market shares of handsets and tablet PCs equipped with ARM-architecture processors and models equipped with Intel processors clearly shows that ARM has a significant upper hand in power consumption, Hurley said. For Intel, the rival is not ARM, but the powerful ARM army consisting of chip vendors including Qualcomm, Nvidia, Texas Instruments and MediaTek, Hurley emphasized, adding that Intel's advantage lies only in funding.
According to Taiwan-based handset supply chain makers, Intel's Atom Z2460 processor is superior to ARM-based equivalents in performance but significantly inferior in power service life and management. Compared with ARM-architecture processors consuming less than 1W, Intel processors have high power consumption, the sources said.
As to the launch of Windows RT, Hurley said that Windows RT will bring opportunities for vendors looking to PC and other market segments with ARM-based products. Intel, feeling the pressure from the ARM/Android ecosystem has signed some sort of an exclusivity agreement with Microsoft (NASDAQ: MSFT). Intel has declared that its upcoming Atom Clover Trail "is a Windows 8 chip" and that "the chip cannot run Linux." Now obviously, this is not quite true, as the Clover Trail uses the x86 instruction set, so there is no reason it could not boot the Linux kernel and run its userland applications just fine.
In a way, teaming up together in such a way does make some sense: Microsoft (reluctantly) supports ARM chips due to market pressure and hates Android, while Intel hates ARM. Combining their efforts, they could push back against the ARM/Android ecosystem. However, what it also does tell me is that Intel is really, really scared of ARM, if they are willing to put their developer goodwill on the line for this.
Intel has cut its Q3 revenue estimate more than expected on Friday because of a decline in demand for its chips as customers lower inventories and businesses buy fewer personal computers. Also, Intel stated that it was scaling back capital spending because of the business slowdown. Intel’s stock saw a 3.6 percent drop, and shares of ASML and other companies that make chip-manufacturing equipment also lost ground.
The company has been affected by shaky economy of the world and another factor which resulted in lower demand is the shift of customers towards smartphones and tablets. Intel stated that demand was decreasing in the emerging markets; however the company’s data center business came in line with the predictions. Earlier in July, Intel decreased its full year sales estimates citing lower demands in the U.S and Europe.
The rapid growth in tablets and phones with "Intel Outside" reflects that leadership is out to lunch. At this point their only option is Microsoft.
SomnathGuha has no positions in the stocks mentioned above. The Motley Fool owns shares of Intel and Microsoft. Motley Fool newsletter services recommend Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.