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Intel Muscles Into Smartphones, Tablets

{complink 2657|Intel Corp.}, the 800-pound gorilla of the semiconductor market, has finally entered the wireless court. After years of trying, the company said its processors will be designed into smartphones and tablet PCs at three of the world's leading OEMs.

At the annual Consumer Electronics Show, Intel announced critical design deals with {complink 1091|China Unicom Ltd.}, {complink 9284|Lenovo Group Ltd.}, and {complink 12925|Motorola Mobility Inc.} — its first successful challenge of {complink 444|ARM Ltd.} in the market. Lenovo, Motorola, and China Unicom will roll out devices based on Intel architecture this year. The world's leading semiconductor company will be getting the validation it has long sought as a player in the wireless industry.

“When great silicon and software technology meets great mobile and design innovation, amazing things can happen,” Paul Otellini, Intel's president and CEO, said in a press release. “Our long-term relationship with Motorola Mobility will help accelerate Intel architecture into new mobile market segments.”

The significance of these design wins for Intel cannot be overemphasized. For years, the company has struggled to break into the sector. It initially fought vainly against the dominance of ARM architecture. Even Intel's PC OEM customers worried that another near-monopoly would result if it gained a large following in the wireless equipment market. There was even speculation that its processors, most of which were designed for the personal computer market, were power hogs and would not be so optimal for the cellular industry.

Efforts to prove the doubters wrong led the company to pour billions into acquisitions and product development initiatives. Many of the acquisitions — some early in the last decade — failed to produce the desired results, and Intel could not make a dent in the sector. More recently, it began deploying its enormous internal engineering resources and the huge cash hoard built up in the PC microprocessor business. Intel has since developed chipsets and reference designs for the wireless market.

These efforts produced the Atom processor, which China Unicom, Lenovo, and Motorola will use. The agreements gave Intel the bragging rights it has long desired and signaled clearly that it won't walk away from the sector, despite the past failures. Few companies would like to have Intel as a rival, as {complink 103|Advanced Micro Devices Inc. (AMD)} can attest.

Meanwhile, in England, a nightmarish journey is beginning for ARM, the IP company that rapidly built up a commanding customer base in the wireless sector on the strength of patronage by customers seeking to ward off another monopoly. ARM has maintained its leading position in this market, but Intel's latest design wins will most certainly break the dam wall. If other OEMs and telecoms embrace the Intel architecture (a lot of incentives from the company would help, especially in a price-challenged market), ARM's marketshare could slip dramatically over the next few years.

Of course, Intel could face another failure if its chips fail to catch fire. In that case, the company would be forced to try again. As Otellini said in a CES presentation, the world is transitioning from a focus on personal computers to a focus on personal computing. Intel cannot afford to be excluded from this wirelessly charged world. Somehow, it has to build on this toehold it has finally secured.

21 comments on “Intel Muscles Into Smartphones, Tablets

  1. DataCrunch
    January 11, 2012

    Hi Bolaji, We knew this was just a matter of time.  Intel has to enter this space, as there is too much at stake.  As I mentioned in previous posts on Intel, I would not bet against them.

  2. _hm
    January 11, 2012

    It is big question mark for Intel. It may not be Intel's product capability, but Intel's high profit margin requirement.

     

  3. bolaji ojo
    January 11, 2012

    Dave, Exactly. How could Intel not go into the wireless market; how could it not keep knocking on OEM doors until somebody opened with a design win; how could it not keep trying to get the product right and; how could it leave the field to ARM? How indeed?

    And with so much money to spend, Intel could afford to keep slugging away until it got just what the customer needed. Now, let's see if that's what it has or if it must still keep throwing money at it.

  4. itguyphil
    January 11, 2012

    But Intel's specialty is not consumer-facing products, it's components. So how prepared may they be (even though they might think they are) to give the customers what they 'want'? You can throw alot of money & resources at it but that doesn't necessarily mean it will be a hit.

  5. FLYINGSCOT
    January 12, 2012

    I see in the Times London that ARM share prices has taken a hefty hit on the news of Intel pushing into smart phones.

  6. Daniel
    January 12, 2012

    As of now ARM is a leading player in mobile chip market and the entry of Intel can make the competition tough. From customer point of view, we have a better option and selection because Intel as we know is superior in chip market with most of the core per processor and threads. So we can expect similar high end processor and multitasking chips from them. As of now the maximum computing power for ARM mobile chips are 1Ghz and it's a limitation for enterprise applications.

  7. Jay_Bond
    January 12, 2012

    Intel has no choice but to continue to grow in the personal computing business. With the huge amounts of cash and their sheer size, Intel needed to continue to pursue the market and find some OEM's willing to join them. I have no doubt Intel will suceed, as long as their are no flaws to their processors.

  8. Wale Bakare
    January 12, 2012

    _hm i agree with you on that.  But Intel has the capability to make market difficult for the likes of ARM and Qualcom. And besides, how would they cope or react to this?

  9. Barbara Jorgensen
    January 12, 2012

    Although Intel certainly has the money and muscle to make headway into any market it sets its mind to, it might struggle with a problem many big companies face: a lack of agility. It has already taken a long time to enter this market, and it's possible that ARM and Qualcomm, as smaller, specilaty companies, will be able to respond quickly and stay a step ahead.

  10. t.alex
    January 13, 2012

    Perhaps we will see the actual products in a few months time. Intel needs to prove its worth this time.

  11. itguyphil
    January 14, 2012

    I mean, they have so much cash on hand that anything is possible, but most 'consumers' don't really have any idea who Intel is as a brand (more techie than anything) except for the commercials. So they have that uphill battle to deal with against the competition.

  12. Wale Bakare
    January 15, 2012

    “…but most 'consumers' don't really have any idea who Intel is as a brand (more techie than anything) except for the commercials”

    Pocharle how effective would that be on Intel in processor manufacturing? It's apparent most mobile device consumers have little or no knowledge about components made up of the devices. As EBN readers and Blogger suggested,  i believe Intel can walk into any technology field of business unperturbed about competition. And Intel into smartphones & tablets,  surely pressure and panic on others.

  13. Himanshugupta
    January 16, 2012

    I can only hope that Intel play ethical after row of lawsuits and penatlies. A desperate company would take desperate measures. Intel has all the muscles and cash to lure most of the companies. If Intel design wins make even a hairline crack in ARM dam then we will see Intel going for the kill. 

  14. Daniel
    January 16, 2012

    Jay_Bond, Intel may be get success with the new mobile chip, but the competition may be tougher. As of now most of the manufactures are comfortable with ARM and its architecture, only concerned about power consumption. Intel is claiming that for their new chip set, power consumption is very less and it may get click in industry for a better mileage.

  15. Daniel
    January 16, 2012

    Barbara, new and late comers has to struggle well, in order to have their own portions in the market. In that angle Intel may take time to capture their market share. Most of the manufactures are using Qualcomm and ARM chips for their devices and moreover they are comfortable with it. Unless and until Intel comes up with chips, which can overcome some of the existing drawbacks and improved efficiency, it may take time to get succeed in market.

  16. SunitaT
    January 17, 2012

    Unless and until Intel comes up with chips, which can overcome some of the existing drawbacks and improved efficiency, it may take time to get succeed in market.

    @Jacob, you are right but lets not forget intel has the advantage of 3d transistors or Finfets.. Moreover Intel has mentioned that they have 'line of sight to 14nm'. This will give Intel huge advantage over ARM.

  17. Daniel
    January 17, 2012

    Tirlapur, as of now most of the manufactures are comfortable with ARM. So if Intel needs an immediate switch over or a mass pull, of course they have to come up with chips having impressive feature. Otherwise also switching may happen, but in a slower mode.

  18. SunitaT
    January 17, 2012

    ARM and Qualcomm, as smaller, specilaty companies, will be able to respond quickly and stay a step ahead.

    @Barbara, how do you think ARM and Qualcomm will respond to this threat from Intel ? What options do they have to make sure that Intel doesn't succeed ?

  19. bolaji ojo
    January 17, 2012

    Tirlapur, It's a big market. There's no way either ARM or Qualcomm could prevent Intel from gaining market share. What they can do is find ways to be more competitive themselves. 

  20. t.alex
    January 18, 2012

    Jacob, this is so true. ARM has developed a widespread ecosystem with numerous opensource projects, resources, know-hows that developers can easily gain access to.

  21. itguyphil
    January 19, 2012

    Wale,

    I guess we will see.

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