JOSE, Calif. ó With a flurry of new chips and
strategies, Intel is mounting its biggest push ever into
a mobile computing market that threatens one of its key
not the first time.
1996, Intel supplied the processor for the Nokia
Communicator that had early features of smartphones, but
it was replaced two years later by an AMD chip.
1999, it supplied the computer processor for the early
BlackBerry, but sold the business to Marvell in 2005.
2004, it supplied the brains for the Palm Treo 650, an
early smartphone that was discontinued four years later.
in 2006, to its lasting regret, it passed on a request
from Apple to make a processor for the iPhone, sending
the Cupertino company into the arms of competitors.
under new CEO Brian Krzanich, Intel is trying again. It
spent billions in 2014 and will again this year to gain
a mobile foothold as it introduces new Atom
microprocessors for smartphones and tablets.
a critical move for Intel, which faces declines in the
sales of personal computers, where Intel dominates as
the supplier of silicon brains.
last week it revised a first quarter revenue estimate
downward by nearly $1 billion, citing slower than
expected PCs sales. The industry-watching International
Data Corp. predicts a 4.9 percent fall in PC sales in
2015, with a $201 billion market in 2014 falling to $175
billion by 2019. Tablets are nibbling at the PC market
and smartphone usage has soared.
the giant chip company into a market dominated by
well-established competitors wonít be easy, said Betsy
Van Hees, who covers semiconductor stocks at Wedbush
she called Krzanich "a huge breath of fresh air. Heís
got a lot of work to do. Itís a huge ship, and turning
a ship of that size takes a lot of time. He is taking
the right steps, the question is, will they be able to
March, Intel announced a range of new products for
mobile computing at the Mobile World Congress in
Barcelona. In January, Intel combined its mobile and
personal computing businesses into a single computing
group, recognizing the two product lines will probably
merge in the future.
has also formed alliances with two Chinese companies
that make chips for mobile phones and consumer
electronic products. And last year it bought Basis
Science, which makes a wrist-worn health tracker, adding
to its Internet of Things arsenal.
determined not to miss the next big thing," said
Mark Hung with the technology research group Gartner.
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company turned in a strong overall performance last year
on a one-time upgrade of corporate PCs triggered by
Microsoftís decision to stop supporting the aging XP
version of Windows. The rise of the smartphone and
tablet has also increased demand for servers in data
centers and chips to power them, Intelís
second-largest business. The fourth quarter was Intelís
best ever quarter.
helps when your other businesses are performing
well," Intel board Chairman Andy Bryant told an
investors conference in November. "When things are
going well it gives you the time and the resolve to make
the changes you need to make in other parts of your
some observers worry that the mobile business will never
be the kind of money maker for Intel that the PC and
data center business have been. Further, they say itís
not likely that many mobile phone and tablet makers will
want Intel as their chip provider, given the companyís
past reputation for not paying much attention to the
needs of customers.
says that has changed. He told investors in November
that Intel no longer says "this is the way we would
like the industry to be. We have been asking ourselves
Ö where do the customers want us to go, where does the
end user want us to go?"
with talk of tablets eroding the PCs market share,
"We had to get in there and be part of that,"
the personal computer is evolving in new directions.
Laptops are beginning to look and act like tablets and
some smartphones are looking more like tablets. Itís a
trend that could provide an opening for Intel, whose
Core M processor is designed for fanless PCs, laptops,
or two-in-one devices.
personal computer is not going away, but like all things
it changes over time," said tech analyst Jack Gold.
"Itís going to morph ó is it a tablet or PC?
Call it what you want. Itís about computing. The way
we look at mobile is going to change dramatically in two
years. There will be wearables, devices scattered
biggest lost opportunity happened in 2006 when the
company turned down a request from Apple for a chip to
power a new phone, fearing that it couldnít
economically make it for the cost and volume Apple
needed. So Apple designed its own chip using technology
licensed from British firm ARM Holdings and had Samsung
most mobile devices run on ARMís designs, which offer
low power consumption and longer battery life and cost
advantages. Seven hundred million iPhones later, Intel
is trying to find a way back in. The company notes that
it hasnít languished, growing revenue from $35.4
billion in 2006 billion to $56 billion in 2014. It
bought Infineonís wireless business in 2010, making it
a supplier of modems ó but not processors ó for
year, Intel posted a $4.2 billion loss in its mobile
group by essentially subsidizing the purchase of its
tablet chips by tablet makers. The company expects its
mobile group to break even in 2016.
is the price you pay for sitting on the sidelines for a
number of years and then fighting your way back into the
market," Intelís Bryant said last November.
"We will improve this. We will not continue to
accept a business with multibillion dollar losses, but
this is the price you pay to get back in. We are getting