Where Is Cedar Trail Taking Intel?

Processor giant Intel (Nasdaq: INTC  ) just released a new handful of mobile Atom chips. They're small and fast, and will make the most of your battery juice. They can stream online video without breaking a sweat and play Angry Birds at 60 frames per second. But don't expect to see these chips in your next tablet or smartphone.

No, Intel is aiming the third generation of Atom processors straight at the dying netbook market. Although these chips seem tailored for tablets, Intel's press materials highlight netbook launches from several top-tier system builders but never mention the words "smartphone" or "tablet."

Though Intel is a member of the Android consortium, that mobile computing platform isn't mentioned either. Instead, Intel professes support for many flavors of Microsoft (Nasdaq: MSFT  ) Windows as well as the Linux-based platforms MeeGo and Tizen. Mr. Softy is great at powering traditional computers with keyboards and mice, but hasn't made a dent in tablets so far. All Android roads, on the other hand, lead to Mobile City.

The tablet and smartphone spaces are absolutely dominated by ARM (Nasdaq: ARMH  ) and its plethora of design partners. You'd be hard-pressed to find anything else on store shelves today, though MIPS Technologies is making inroads in Asia as we speak. Advanced Micro Devices recently fired an otherwise excellent CEO over a lack of mobile strategy, and yet here Intel goes, focusing on a netbook format whose halcyon days are already behind it.

For Intel's sake, I hope that this is the last Atom generation with a yen for netbooks. The company knows that demand is falling fast in North America, Europe, and the Far East -- key markets, all. Emerging markets are still picking up netbooks, and Intel expects "a long-term, sustainable netbook business driven by emerging countries." Well, fads grow stale even in Africa and Latin America. This too shall pass.

Follow along on Intel's meandering mobile adventure by adding the company to your Foolish watchlist. Then look here for a more focused investment idea in the mobile market. A few chip makers are doing everything right.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Intel and Microsoft, and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Microsoft and Intel, as well as creating bull call spread position in both stocks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


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  • Report this Comment On December 29, 2011, at 3:40 PM, roguesisland wrote:

    More negative Intel diatribe. The BS never ceases.

    Intel is doing everything right but no one would know it by reading all the negative, regurgitated diatribe growing like a cancer on the internet. Intel is perhaps the greatest company to grace planet Earth [past, present and future]. Microprocessors will run virtually everything made in the world in the future, and where is Intel's place in all this? Right where it is and where it will remain... #1 in the industry. My prediction - Intel will be at $100 billion a year in revenue in less than 20 years with cash flow on the $25-30 billion a year scale. Share price if shares are reduced to 5 billion in that span of time - $150-$175.

    Thank you.

  • Report this Comment On December 30, 2011, at 10:00 AM, TMFZahrim wrote:

    rogues, I'm sorry you thought this was a diatribe against Intel. I'll leave you with this thought:

    http://xkcd.com/386/

    Anders

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