The shift to mobile computing caught many ‘old’ tech companies unprepared, and as a result staying relevant has become a struggle for many of these firms. Intel Corporation (NASDAQ:INTC) is one of companies that was slow to catch on to this shifting environment, and unlike some of the chip makers that managed to capitalize on mobile, its share price hasn’t really gone anywhere over the last decade. Now, the company is finally planning to make its grand entry into the mobile arena, which could seriously disrupt the current status quo.
Old Chips, New Chips
So far, the mobile processing market has been dominated by two main players, QUALCOMM, Inc (NASDAQ:QCOM) and ARM Holdings plc (ADR) (NASDAQ:ARMH). Qualcomm currently holds some 50% of the mobile application processing market, and over 85% over the LTE modem market. Qualcomm’s Snapdragon processors are incorporated into all kinds of mobile devices, including the Samsung Galaxy phone. ARM on the other hand has the dominant position in licensing the design architecture for mobile processors, supplying QUALCOMM, Inc (NASDAQ:QCOM) among others, powering some 90% of the mobile processing market and roughly a third of the mobile computing market. ARM Holdings plc (ADR) (NASDAQ:ARMH) has experienced an absolutely meteoric rise in its share price over the last few years, going from around $5 in 2009 to over $40 at the moment.
Now, it appears as if the sleeping giant has awoken. Intel Corporation (NASDAQ:INTC) has introduced two new chips, Haswell and Silvermont, with which it aims to shake up the mobile processing market. Additionally, the company will offer an LTE chip. According to Intel, the 22nm Silvermont processor is capable of supplying three times the processing power of competing models, at only one fifth of the battery use. Whereas other chip makers function as ‘fabless’ companies, meaning that they rely on foundries for their manufacturing, Intel Corporation (NASDAQ:INTC) has these capabilities at home. This provides Intel with significant scale and cost advantages, as it has invested heavily in its manufacturing capabilities over the last few years.
The key question is whether the industry will adopt Intel Corporation (NASDAQ:INTC)’s new designs, and there are some indications that this will be the case. First of all, Samsung will be incorporating the Haswell processor into a new Galaxy tablet. Secondly, the Haswell processor will probably be seeing incorporation in a wide range of laptops, including products from Lenovo, Hewlett-Packard Company (NYSE:HPQ), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), and Sony Corporation (ADR) (NYSE:SNE). All in all, Intel Corporation (NASDAQ:INTC) has announced around 50 devices that will be using either Haswell or Silvermont chips. Intel’s new chip offerings may finally be the catalyst investors have been waiting for so long.
