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Intel Agrees: The TouchBook Is Toast

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Intel (Nasdaq: INTC  ) chief Paul Otellini made waves today with a series of pronouncements at a presentation happening out in San Francisco. So far, the headlines seem to boil down to two points:

"Google and Intel, sitting in a tree, K-I-S-..."
Headline No. 1 is that Intel will partner with Google (Nasdaq: GOOG  ) to "optimize" the performance of Android mobile-phone software on Intel chips. Henceforth, Google says it will be examining all work on its Android software to ensure that it works well with Intel technology. On one hand, this seems strange given Intel's oft-reported interest in getting Apple (Nasdaq: AAPL  ) to use its chips in the iPhone. But on the other hand, considering that there are more Android phones on the market than iPhones, it's a good hedge against Apple's fickle loyalty to its chip suppliers. It's also a hedge against Apple's current strategy of designing its own ARM Holdings (Nasdaq: ARMH  ) -based smartphone and tablet processors in-house.

TouchBook is toast
Speaking of mobile Intel, Intel's also just called a strike against Hewlett-Packard's (NYSE: HPQ  ) value as an investment. Asked at the conference whether he might be interested in acquiring HP's PC business, now that it's up for sale, Otellini gave an unqualified "no." Even if HP does proceed with plans to spin off its PC biz, Intel would not buy it. When you consider how very cheap HP has become, and how this suggests a fire-sale price tag on the unit, the disappointment continues for HP investors looking for any out from the PC business. One less potential buyer means one less potential bidder to drive up the unit's price when it goes on the block, and one less chance anyone will step in to save shareholders from the effects of the ill-considered Palm acquisition.

Foolish takeaway
For those keeping score at home, the upshot of Intel's conference comments is bad news for HP, and worrisome news for Apple as well, but good news for Google.

What ground-shaking news will Intel announce next? Add it to your Fool Watchlist and find out.

Fool contributor Rich Smith owns shares of Google. The Motley Fool owns shares of Google, Intel, and Apple and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Intel, creating a bull call spread position in Apple, and creating a diagonal call position in Intel.

We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 13, 2011, at 7:30 PM, YetAnotherNerd wrote:

    Don't really consider it "worrisome" for Apple in that Google's biggest threat has always been the fact that they just want to get copies of their OS on anything and everything, so in that regard, this changes nothing. I don't think the issue with Android tablets is the cpu, so whether it has an Intel or ARM is pretty much irrelevant for that space. Now, if Intel manages to some how greatly outpace the ARM contingent, then that's another story (shades of PPC vs x86).

    Maybe goog will buy intc so they can really compete head to head with Apple. How long before the first Google Store crops up next to the Apple Store (and the MS store).

  • Report this Comment On September 14, 2011, at 12:24 AM, drborst wrote:

    I don't get it.

    First, why would having Android working on Intel chips have anything to do with Apple's decision on which processor they use in the iPhone? Macs used to run on something else (IBM's Power PC chip if memory serves), and Apple's competitor's at the time used Intel chips. Apple could do it again with the iPhone/iPod/iPad if they wanted to.

    Second, and even stranger to me, is the suggestion that Intel might consider buying HPs PC unit. That would make Inel compete with Dell and Levono and the rest.

    I'm trying to figure out if anything in the article is of any value

  • Report this Comment On September 14, 2011, at 12:55 AM, Fooleoni wrote:

    TouchBook? Is this the author's guess at what the HP TouchPad is called? Did he fact check that on his iTouch?

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