This Metric Means Everything to Intel Investors

The following video is part of our "Motley Fool Conversations" series, in which we talk about topics around the investing world. This time, Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova talks about the one number Intel (Nasdaq: INTC  ) investors need to be tracking this year.

The world's leading chipmaker is in a worldwide struggle with ARM Holdings (Nasdaq: ARMH  ) to be the top supplier when it comes to mobile devices. Progress is coming, but too slow for shareholders. First-quarter revenue met expectations while coming in $0.03 ahead on earnings. Investors nevertheless sold on fears that sharp demand for tablets would take a toll on results this year.

Worse, years of efforts to promote its small-scale Atom designs haven't swayed smartphone makers away from ARM. Lenovo and Motorola Mobility won't have smartphones using Intel chips until the second quarter, while computer partner Apple (Nasdaq: AAPL  ) still uses the ARM core for its A5 and forthcoming A6 chipsets.

But the big battle is still to come. Just as Intel is spending billions to get its chips embedded in handsets and tablets, ARM is making a play for the PC market and already counts Microsoft (Nasdaq: MSFT  ) as a partner. The first Windows 8 machines running on ARM-powered chips are expected to arrive later this year. Which company will see the bigger payoff? One metric will tell the story. See more in the following video.

Although Intel and ARM grab headlines, they aren't the only ones profiting from a worldwide shift to mobile computing. Another company is equally well positioned. You might even call it a multibagger in the making.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Intel, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Intel, Microsoft, and Apple and creating bull call spread positions in Microsoft and Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (5) | Recommend This Article (6)

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 April 24, 2012, at 9:55 PM, russfischer1013 wrote:

    Tim,

    What's the ONE metric that Intel investors will be looking for??

    This was not among your best work.

  • Report this Comment On April 25, 2012, at 8:09 AM, TMFMileHigh wrote:

    @russfischer1013,

    I'm always open to useful criticism, especially from a long-time Fool like yourself. Where did this story go off the rails for you and what should I have done better?

    Thanks much and Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

  • Report this Comment On April 25, 2012, at 8:23 AM, russfischer1013 wrote:

    "Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova talks about the one number Intel (Nasdaq: INTC ) investors need to be tracking this year."

    I didn't catch the "one number" referred to here.

    Your commentary was mostly about ARMH while featuring Intel in the title line.

    I understand the pressure to produce these articles, but you have done better.

    There is enough great things happening with Intel directly, but the real story is how badly the manufacturing competitors (foundries) have mis-calculated and stumbled. ARMH without leading edge manufacturing partners has serious problems.

    http://investorvillage.com/smbd.asp?mb=19&mn=224&pt=...

  • Report this Comment On April 25, 2012, at 8:47 AM, TMFMileHigh wrote:

    @russfischer1013,

    Fair enough. To be clear, I believe the one metric that matters is Ultrabook shipments. That's the sword Intel is using to slice open the mobile market.

    Separately, I thought your boards commentary on process technology and Intel's lead was interesting. I've not seen where Intel has committed a specific percentage of capacity to manufacturing third-party chips -- maybe I just missed it?

    Doing that for the most needy mobile chip designers could be a very interesting strategy indeed, but the lure would have to include moving to Atom, right? Isn't that problematic given Intel's recent history with anti-trust regulators? "Here, we'll give you X, but you need to use our designs."

    Thanks again for the comments and Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

  • Report this Comment On April 25, 2012, at 4:46 PM, russfischer1013 wrote:

    Tim,

    Ahhh, yes Ultrabook sales. I'm waiting for one, but I'm waiting for the Ivy Bridge for battery life and no extra graphics chip (g'bye Nvida and AMD).

    I don't see Intel doing foundry work for companies like Nvidia, AMD QCOM, etc. Intel considers those companies competitors. I could see them doing foundry work for Altera, for example. Certainly for Apple. In the apple situation it would probably be ARM based at 32nm, but NOT 22nm until the design includes an Atom processor. Apparently there is a new Atom in the pipline that should end the ARMH vs. Intel discussion.

    As I've mentioned elsewhere a smart thing for Intel to do would be to design a mobile SoC with all the 7-8 major functions required hardwired into the chip and then add 10-20 million FPGA gates as a "playground" for bright engineers to differentiate their end products. Since 22nm would allow 100 million transistors on the head of a pin, the cost is silicon for the FPGA section would be miniscule.

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