Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Should Intel Corporation (INTC) Buy Its Way Into Mobile Devices?

Page 1 of 2

There is no question that Intel Corporation (NASDAQ:INTC) has long been established as the 800-pound gorilla of the personal and laptop computer industry. There is also no question that they were horribly slow in recognizing the need to gain entry into the mobile device market and have since struggled to gain momentum and market share in that space. With a new CEO committed to bold and decisive action, will Intel Corporation (NASDAQ:INTC) continue its attempts to develop its own innovative product line for this market segment — or speed up the process and simply buy one?

Intel Corporation (NASDAQ:INTC)

The future is upon us

Intel Corporation (NASDAQ:INTC)’s new CEO, Brian Krzanich, has created a new division in the company to focus on the rapidly changing and fast growing market for mobile devices. His views would appear to leave the door open to reach his objectives through acquisitions. A purchase of the right company, coupled with Intel’s financial resources, could create a new powerhouse in the supply chain for mobile device chips.Given the time and cost of developing new technologies from scratch, it makes sense for Intel Corporation (NASDAQ:INTC) to pursue acquisitions that will allow them to achieve their objectives faster and cheaper.

Intel Corporation (NASDAQ:INTC) spent a total of $10.15 billion on R&D in 2012, and at the end of the March quarter of 2013, it had a total of $10 billion in cash and short-term investments. This provides it with wide latitude when seeking opportunities to buy instant entry into the mobile device market. Acquiring an existing product line with ongoing R&D would allow Intel to enter this rapidly evolving market with existing products and replacements in the pipeline. This combination would have the potential to turn a competitive business into a dominant one very quickly. It would also virtually eliminate the problem of gaining market acceptance of new and unproven products.

Potential acquisition targets

Cirrus Logic, Inc. (NASDAQ:CRUS) is a fabless designer and developer of analog and mixed signal circuits for both consumer and commercial markets. The term “fabless” in this industry means that it does not own the manufacturing facilities where its chips are produced. Cirrus is estimated to depend on Apple Inc. (NASDAQ:AAPL) for approximately 82% of its sales and its share price has been crushed over the past year.

Those holding shares of Cirrus Logic, Inc. (NASDAQ:CRUS) from its September 2012 high of $45.49 through its June 2013 low of $16.46 would find little to smile about. A business like Intel Corporation (NASDAQ:INTC), looking for instant credibility in the mobile device market, should be licking its lips over the enticing snack an acquisition of Cirrus Logic, Inc. (NASDAQ:CRUS) could provide.

The fact that Cirrus is a supplier to Apple Inc. (NASDAQ:AAPL) in the mobile device market establishes its capability for high-end innovative technology development. The fact that it is a fabless developer is attractive in that it would provide product designs that could be integrated into Intel’s fabrication capabilities and absorb existing excess capacity.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!