Intel Corporation (NASDAQ:INTC) has scored a big chip win from Samsung. This could be the catalyst that Intel’s shares, and business, needed to head higher.
A 10” Galaxy
Samsung recently announced plans for upgraded versions of its eight and ten-inch Galaxy tablet computer. The Galaxy line of products is based on Google Inc (NASDAQ:GOOG)‘s Android operating system and has been a massive success for Samsung. In fact, the Galaxy line of phones and tablets are the only real competitors to Apple Inc. (NASDAQ:AAPL)‘s iPhone and iPad products.
According to All Things D, Intel Corporation (NASDAQ:INTC)’s “Atom chip using the Clovertrail+ architecture” will power the ten-inch Galaxy. This is a huge win for Intel.
Missing the boat
Intel Corporation (NASDAQ:INTC) missed the mobile boat. It continued to focus on its bread and butter personal computer (PC) and server chips even though consumers were moving toward mobile devices. To be fair, PCs and servers are far from dead. In fact, every mobile device interacts with a computer when it connects to the Internet.
Not having a mobile presence, however, left a big hole in Intel’s product portfolio. It also led to big questions about the chip giant’s growth prospects.
Playing catch up
Intel Corporation (NASDAQ:INTC)’s massive size and financial strength, however, left it with plenty of firepower to play catch up. To that end, it has been working with Google Inc (NASDAQ:GOOG) to create chips specifically designed to support Android-based devices. However, it hadn’t scored a big win until the ten-inch Galaxy tablet.
The market has been increasingly pleased with the progress at Intel, boosting the stock from around $20 a share six months ago to around $25 recently. The Galaxy news, understandably, led to a big one-day jump. Intel Corporation (NASDAQ:INTC), however, hasn’t broken out of the range it’s been in for about a decade, so, there’s still time for investors to jump aboard.
With a yield of around 3.70% and a long history of dividend increases, income investors should like what they see here. However, if the company can find another big customer in the mobile space, growth investors might want to take a closer look, too.
An Apple of a deal?
Samsung and Apple Inc. (NASDAQ:AAPL) are the two big competitors in the phone and tablet world, which makes them Intel’s prime customer targets. With a toe in the door at Samsung, there could be more business here if Intel’s chip performs well. Despite positive rumors, Apple is likely to be a tougher sell.
Apple likes to control every aspect of its products. Intel Corporation (NASDAQ:INTC), meanwhile, both makes and designs chips. It isn’t used to being a chip foundry. So, the two may never be able to come to terms. Of course, Apple Inc. (NASDAQ:AAPL)’s focus on control is one of the reasons why its shares have traded down from their high-water mark of around $700 a share.
