Since the beginning of 2013, shares of Intel Corporation (NASDAQ:INTC) rallied by more than 16%, which is roughly in-line with the progress of leading stocks indexes. Despite this rally, Intel has yet to recover from its tumble during the second part of 2012, which was partly stemmed from Berkshire Hathaway Inc. (NYSE:BRK.A)’s departure back in September 2012. Since then, Intel’s revenue continues to dwindle and its profit margin further shrank. Is Intel Corporation (NASDAQ:INTC) an investment worth having?
Intel’s dominance in the PC and laptop markets isn’t questioned. But the company has yet to make a dent in the smartphone and tablet markets. Now the company is ready to take the next big step in mobile and tablets with its new Haswell chip lineups. Moreover, Intel Corporation (NASDAQ:INTC)’s Haswell chip could also be a game changer in the laptop market. If this new line of microprocessors pans out, this could bring Intel back to its former glory days. Let’s see why.
Will Haswell become a game changer?
I think this is the most important question Intel Corporation (NASDAQ:INTC) investors should ask. Intel’s dominance in the PC and laptop microprocessor markets isn’t questionable. The main issue will be whether the company will be able to take a sizable market share in the tablet and smartphone markets, and whether it will be able to augment the demand for laptops.
The company’s new fourth-generation core processors, which are also named Haswell, will be revealed in early June. The company has been putting out a new generation of processors on a yearly basis so what is different? The difference is that the new processor is claimed to increase battery life by 50% for laptops and by 100% for Ultrabooks; it will also double the graphic performance in laptops and triple that of desktops.
If these specifications actually come through, this could mean a game changer that might shift more customers toward Ultrabooks and laptops. Moreover, Intel also expects to introduce this Haswell processor to tablets. This could bring Intel Corporation (NASDAQ:INTC) one step closer toward taking away the dominance of other leading companies such as ARM Holdings plc (NASDAQ:ARMH) or QUALCOMM, Inc. (NASDAQ:QCOM) .
Entering the tablet and mobile markets
It’s well established that Qualcomm has a strong hold in application processors and LTE cell-phone modems with a market share of 50% and 86%, respectively. In comparison, Intel’s market share in the application-processor market was less than 13% in the first half of 2012. Intel’s new ‘Silvermont’ chip, if the promises will follow through, could make Intel Corporation (NASDAQ:INTC) a serious contender in these markets. Based on the current promises, Silvermont will operate at three times the speed of Intel’s past Atom processors and will use only one-fifth of the power consumption.
ARM Holdings plc (NASDAQ:ARMH) controls more than 90% of the smartphone-processing market. This means Intel will have a very rough road ahead until it is able to augment its market share in the mobile and tablet markets.