Owing to its huge footprint in mobile, ARM managed to deliver better-than-expected quarterly results. According to the semi-conductor heavyweight’s website, its semiconductor designs span across close to 95 percent of the smartphone market. I believe the jury is still out on the accuracy of these self proclaimed figures. Nonetheless, these numbers, accurate or not, paint a picture of ARM’s dominance.
Gartner believes that unit growth for tablets in 2013 will come in at 39 percent and smartphones 33 percent. If these figures are to believed, ARM’s prospects couldn’t get any better.
Moving over to QUALCOMM, Inc. (NASDAQ:QCOM), it becomes more apparent that a bigger presence in mobile translates to better earnings. Just like ARM Holdings, Qualcomm also managed to perform impressively during the past quarter. Its revenue edged up 29 percent, while its chip revenue increased 34 percent.
Qualcomm’s dominant IP in CDMA and LTE similarly presents good prospects. It gives the chip maker a huge edge in a market where data capabilities have become a unique selling point for carriers and device makers alike.
The chart offers deeper insight on how smartphones and tablets are gaining more relevance relative to PCs.
As shown, demand for smartphones outstripped that of PCs in late 2010. Going by the trend, the crossing point between tablets and PCs is imminent. The bottom line is that PCs will lag tablets somewhere in 2013, perhaps even in the next quarter.
PC is dead; just look at Dell Inc. (NASDAQ:DELL)
Frankly speaking, the PC is dead. PC fanatics may label me a naysayer or thwarter for that matter, but the reality will soon dawn; the PC market no longer presents favorable prospects.
Just look at Dell. The PC maker has been looking to go private and if recent reports are to believed, already has. Other PC players like Hewlett Packard are neck-deep in bearishness and the only direction that they seem to be heading is south.
I believe that Intel needs to penetrate mobile as soon as it can. The Yolo initiative in Kenya should just be the onset of a new approach to business
In conclusion, I am of the opinion that Intel’s current technology outstrips market requirements. In my view, this demonstrates the great potential in the chip maker. This high potential, coupled with the market’s low expectations and the current low share price, presents a good entry point into the stock. If Intel manages to fully filter through the smartphone and tablet segment, it will definitely reverse its fortunes and give shareholders a good return on their investment. Intel is a good buy.
The article Intel Fancies its Chances in the Budget Smartphone Market originally appeared on Fool.com and is written by Lennox Yieke.
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