Intel Corp (INTC, Financial) is in news. The tech giant has once again stepped into the mobile-phone chip market after more than a decade of failed attempts. The company believes it can fine tune the new processors that will go on sale this year, in the smartphones and tablets market. Not only has this chip-making giant launched its new chip, it has also joined hands with Google (GOOG, Financial), to aid Swiss watchmaker TAG Heuer to design and launch a luxury smart watch by the end of this year. The unnamed watch will have a chipset designed by Intel and run Android Wear. The latter is Google's modified version of its Android mobile operating system.
This desperate bid to enter the smartphone and smartwatch market arises out of falling shares because of falling demand for PCs. However, those who have been following the company may be a bit skeptical. This is not the first foray by Intel in this mobile market, and its previous attempts yielded disastrous results in 2014. Let us see what Intel hopes to do better this time, and whether it can build consumer as well as investor confidence.
Aiming at the mobile market
2014 was only the beginning of Intel's plan to conquer the mobile market. At the Mobile World Congress earlier this month in Barcelona, Intel presented the audience and the world with three new Atom SoCs (System on Chip). Intel's mobile lineup now also includes a variety of mobile devices, from economical smartphones to premium two-in-one devices. Though it took time for Intel to return to the mobile phone market, its new Atom chips x3, x5 and x7, the company can be seen standing in the same league as Qualcomm (QCOM, Financial).
What are these Atoms?
The Atom x3 is Intel’s first chip with an integrated modem. It is supposed to be used for economical cell phones, the ones costing below $75. This chip is available in both 3G and LTE variants. The Atom x3 is a Bay Trail SoC, built on a 28nm process. Its purpose is to keep the costs low. Having an integrated modem is more important for the cheaper mobile phone versions as bringing costs down as low as possible is critical.
The Atoms x5 and x7 are Cherry Trail paths. They aim at tablets and two-in-one devices priced at $119 and above. The two are also in news because they are Intel’s first 14nm mobile chips. However, these two chips do not have an in-built modem and will have to take help from external sources.
The mobile version of Windows 10, which will soon be launched, will also support all these chips. This will be the first time an Intel chip will power a Windows phone, something Qualcomm does not offer. All major PC manufacturers like ASUS (ASUUY, Financial), Foxconn, Pegatron, Dell (DELL, Financial), Hewlett-Packard Company (HPQ, Financial), Lenovo (LNVGY, Financial), Acer and Toshiba (TOSBF, Financial) are expected to launch mobile products powered by these chips.
Costing for Intel
In 2014, Intel suffered a huge operating loss of $4.2 billion, owing to its mobile phone venture. The reason given for this was the company’s subsidization of its tablet processors. To come out of the same and make a better impact, the tech giant hopes to extract about $800 million in costs, out of the same mobile phone business this year. The company is also banking on the Atom x3, also called SoFIA, by having it launched without subsidies. Another smart launch that Intel did was introducing its next-generation XMM 7360 modem, which will pair with all the new chips. It will also let phone users pull data from cellular networks at a speed of as fast as 450 megabits per second.
Parting thought
Given these intelligent launches by Intel, the tech world is hopeful of a revolution in the market. Right now, the only thing Intel lacks is a chip for high-end smart phones though rumors are doing the rounds that the next iPad might run on Intel chipset. Intel does have the power to shun all traditional views about the internet. And this may just be what turns the company around.
