Can Chip Giant Intel Capture the Mobile Market?
Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.
Intel (NASDAQ: INTC) is the dominant player in the PC market, but it has yet to gain a real foothold in mobile computing, which is rapidly becoming a serious weakness for the chip maker. While the company has put serious strain on competitors in the PC market, Intel has had very little luck taking mobile market share.
Recent downgrades from Barclay’s and Sterne Agee also point toward mobile weakness as a serious issue for Intel. Sterne Agee downgraded the company to neutral citing 2 issues: manufacturers are expected to use more ARM chips, and Qualcomm (NASDAQ: QCOM) is in a better position to take advantage of smartphone growth. I’ll admit, as a shareholder of Intel, the mobile market does cause some concern. Throw in the fact that Microsoft (NASDAQ: MSFT) has decided to allow their new operating system, Windows 8, to run on ARM chips, and it appears Intel is at a pivotal point. The company has to really put on a show this week at the Consumer Electronics Show in Las Vegas, to both defend its position in the PC market and to start building a significant presence in the mobile arena.
Intel has new technology to show off at CES, including their new three-dimensional chip, called Ivy Bridge, expected in the second quarter of 2012. According to the company, the benefits of the 3D tri-gate transistor technology are significant, boasting graphics improvements as well as up to a 37 percent improvement in power efficiency. This new chipset is expected to be in refreshes of Apple’s (NASDAQ: AAPL) MacBook Air and Pro lines, as well as in the iMac. Intel still lacks a chip that Apple would use in iOS devices, much to the disappointment of every one of its shareholders. The Ivy Bridge chipset is also expected to make an appearance in the multitude of ultra-books expected to hit the market in the next year.
Also on display will be the company’s new answer to ARM chips, named Medfield. The Medfield chipset is touted as having enhanced graphics, faster web browsing, and most importantly, it uses significantly less battery than currently available chips. If this technology lives up to expectations, I think Intel is headed down the right path, and will be able to put its extensive experience and deep reserves into capturing the mobile computing market. As I mentioned earlier, I’m long INTC and expect the company to position itself profitably for years to come.
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