Intel Expands Its Mobile Push With New Chips & Platforms

by Trefis Team
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Quick Take

  • Increasing cannibalization from tablets & smartphones has lowered PC sales which in turn has impacted Intel’s growth rate
  • Intel entered the mobile computing market in 2012 and currently accounts for <1% of the global smartphone chip market
  • Intel’s R&D expenditure increased by 22% in 2012 as its focused on developing more energy efficient chips
  • A range of new products underline Intel’s intention to expand its mobile footprint
  • New products launched: First dual-core platform (Clover Trail), LTE compatible chips (LTE connection estimated to double in 12 months) and new low-cost smartphone platform (market size to reach 500 million units by 2015)
  • Intel will launch its first quad-core platform (Bay Trail) and switch to 22nm by this year end

Intel (NASDAQ:INTC) has led the PC microprocessor market for the last two decades and thus the declining PC shipments has impacted the company’s growth rate. Apart from macro headwinds that has led to weaker consumer spending, the increasing popularity of smartphones and tablets has cannibalized PC sales. Aiming to remain a front-runner in the global technology revolution, Intel began a focused push in mobile computing last year. However, it has yet to make a significant dent in the mobile market that is dominated by established ARM based players such as Qualcomm (NASDAQ:QCOM), Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:BRCM).

Nevertheless, Intel has made good progress in mobile computing in the last year. Though it accounts for less than 1% of the global market share in smartphone chips, it currently has seven phones and 10 tablets shipping across 20 countries that support the Windows 8 and the Android operating system. [1]

As Intel’s processor in general consumed more power, they were not considered suitable for use in mobile devices. However, the company has worked towards developing more energy efficient chips and its processors now compete with ARM designs on performance, and have equal or better power and battery life. Intel’s R&D expenditure increased by 22% in 2012.

Earlier this week, Intel announced a range of new products which underline its intention to continue increasing its footprint in the mobile computing space. Despite increasing competition, we believe that an expanding mobile portfolio will help Intel increase its penetration in the smartphone and tablet market.

See our complete analysis for Intel


In addition to the new products introduced this week – the first dual core SoC, a new low-power Atom processor based platform and LTE compatible chips – Intel will introduce its first quad-core processor and shift to the 22 nm platform later this year. Overall, 2013 has a robust pipeline of new platforms and products, which we feel will help increase Intel’s competitiveness in the mobile market.

1. Intel’s First Dual-Core Atom SoC – Clover Trail

Intel introduced its first dual core chip for smartphones and tablets that offers longer battery life, high performance and advanced imaging capabilities. The company claims that the Clover Trail products deliver double the performance and up to three times the graphics capabilities compared to its predecessor, the Medfield platform. The Clover Trail is available in three variations - 2.0 GHz, 1.6GHz, and 1.2GHz – and come with a graphic media accelerator engine.

While Lenovo has already announced a new device powered by the Clover Trail platform, Asus is expected to introduce new products soon.

2. LTE Compatible Chips

4G LTE is the future of wireless connectivity for mobile devices, especially smartphones, and a dominance in the production of LTE chips has enabled Qualcomm to lead the mobile market so far. The 4G market is expanding at a rapid pace with the LTE connection estimated to double to over 120 million connections in the next 12 months. [2] We believe that LTE compatibility will further strengthen Intel’s product portfolio and increase its penetration in mobile computing.

Earlier this week, Intel introduced one of the industry’s smallest and lowest-power multimode-multiband LTE solutions (XMM 7160) that supports smartphones and tablets as well as ultrabooks. The multi-mode LTE processor enables phones to access older networks in locations where 4G isn’t available. The company currently ships the single-mode 4G LTE data solution and the multi-mode solutions will start shipping later this year.

While the LTE compatibility is a welcome move, Intel’s competitors are way ahead in the market. Qualcomm claims to have already bagged a significant number of design wins for its upcoming Snapdragon 800 and Snapdragon 600 processors that are estimated to deliver as high as 40% improved performance compared to Qualcomm’s S4 Pro processor. In addition, Qualcomm is expected to introduce an upgrade to its 3rd-generation LTE solutions later this year. Nvidia introduced its Tegra 4 family, which features built-in 3G and 4G/LTE communication technologies, to make a deeper foray in the smartphone and tablet market. Broadcom recently introduced its new LTE chip which will be commercially available in 2014.

Integrated LTE application processors turn out to be cheaper than buying the processors separately. Intel has yet to come up with an LTE intgrated application processor, which might limit its reach in the broader mobile phone market.

3. New Smartphone Platform For Emerging Markets

Intel introduced a new low-power Atom processor based platform, Lexington, a cheaper and improved version of its Medfield platform. With the new chipsets, Intel aims to target the fast growing low-end smartphone and tablet market, a segment that is estimated to reach 500 million units by 2015. [3] 

Acer, Lava International and Safaricom are some of the customers who have announced new Intel-powered handsets in Thailand and Malaysia, India and Kenya respectively. Additionally, Intel has collaborated with Etisalat Misr, a leading telco operator in Egypt, to debut its handset in Egypt in April this year.

4. Quad-core Processors & 22 nm Platform Will Be Available Later This Year

Intel will introduce its 22nm smartphone Atom SoC (Merrifield platform) and its first quad-core Atom SoC (Bay Trail) later this year. Currently most of Intel-powered phones use the 32-nanometer Medfield SoC.

The Merrifield platform will be based on a new Atom micro-architecture that will increase performance, power-efficiency and  battery life of Intel-powered smartphones. Intel claims that the Bay Trail will be its most powerful Atom processor till date with almost double the computing performance and lower power consumption than its current generation tablet offering.

Our price estimate of $32.88 for Intel is at a premium of over 40% to the current market price.

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Notes:
  1. Intel debuts new smartphone chip as mobile market consolidates, Dawn.com, February 25, 2013 []
  2. Intel Accelerates Mobile Computing Push, Intel Newsroom, February 24, 2013 []
  3. Intel Delivers Broad Range of New Mobile Experiences, Intel Newsroom, January 7, 2013 []
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