Intel Expands Mobile Computing Reach With New Atom Processors

by Trefis Team
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Managing to retain its dominance for the past two decades, Intel (NASDAQ:INTC) remains the undisputed leader in PC microprocessors. However, with the current slowdown in PC shipments growth and the increasing popularity of mobile devices, smartphones and tablets are expected to fuel growth in the semiconductor industry, going forward.

Marking its entry in the lucrative smartphones & tablets segment this year, Intel ensured investors that it is determined to stay in line with shifting consumer trends. However, though the company has had a number of design wins in this segment so far this year, it has yet to make any significant indent in a market highly dominated by ARM-based players such as Qualcomm (NASDAQ:QCOM) and Nvidia (NASDAQ:NVDA).

Introducing its new processor code-named Clover Trail (Atom Z2670), which will be primarily used in tablets that feature Windows 8 OS, Intel takes another step towards expanding its presence in the mobile computing space.

We estimate Intel’s revenues from this division to almost triple and the market share to reach around 9% by the end of our forecast period. Apart from the booming growth in smartphones and tablets, we feel that other new Atom based devices such as Google TV, car infotainment systems, home and business energy management systems will improve Intel’s Atom processors share by increasing its available market.

See our complete analysis for Intel

Clover Trail – The New Intel Atom Processor

The new Intel Atom processor supports for the thinnest and lightest tablets – as thin as 8.5 mm and 1.5 pounds in weight. The dual-core, quad-threaded processor boasts of a more than three weeks connected standby and over 10 hours of local HD video playback. The company also claims that the tablets running on Intel-architecture will have compatibility to Windows 7 software and tools. [1]

Intel, along with its OEM partners including Asus, Dell, Acer, HP and Samsung, among many other, unveiled their first wave of new tablets and tablets convertible design which will be based on Atom Z2670, Intel Core vPro and Intel Core processors. Intel claims to have close to 20 tablets in its pipeline up for launch this year.

Threat From ARM Holdings

Controlling close to 90% of the smartphone applications market (as per company presentation, 2011), ARM Holdings (NASDAQ:ARM) claims not to be threatened by Intel’s entry in this arena. The company feels that ARM-based processors are popular in the market for their superior processing power in smartphones and tablets.

Additionally, Microsoft (NASDAQ: MFST) has specifically developed Windows RT, a version of Windows 8 OS for ARM devices such as tablets. While in the smartphone division Intel faces threats from established ARM-based players such as Qualcomm, when it comes to tablets Nvidia seems to be performing exceptionally well so far. An increasing number of product wins for Nvidia’s Tegra 3 processors and Qualcomm’s leap to 28nm process technology with the introduction of its Snapdragon processor are thing that Intel needs to win in this market.

We have a price estimate 0f $31.94 for Intel, a premium of over 40% to the current market price.

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Notes:
  1. Intel and its Partners Unveil Range of Tablet Designs and Experience Running Windows 8, Intel Newsroom, September 27, 2012 []
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