Does Intel Need to Cannibalize Itself to Survive?

As the world continues to embrace the mobile computing revolution, Intel (NASDAQ: INTC  ) remains entrenched in the PC world. In the coming years, Intel hopes it can gain a foothold in the smartphone and tablet space with the help of its technologically superior foundries. Given the market conditions within the mobile computing industry, Intel may be up against revenue pressures in the future. In this video, Fool contributor Steve Heller weighs in on if Intel needs to cannibalize itself to survive and what that could that mean for investors longer term.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.


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  • Report this Comment On May 25, 2013, at 1:47 AM, stretcho44 wrote:

    Steve,

    2013 tablet shipments are going up by 63% and "PC's" are going down by a couple percent.

    The IDC definition of a "TABLET" is ANYTHING with a detachable keyboard. For example, the MSFT Surface Pro with the detachable keyboard is counted as a TABLET. The SurfacePro has a 3rd Gen Core i5, Intel 3 i5-3317U / 1.7 GHz.

    Much of the tablet volume and especially the 63% tablet increases for 2013 are coming from a FORM FACTOR change where PC's are going to be classified as tablets.

    The number of PC's that will be classified as TABLETS, far exceeds the IDC projected drop in PC units.

    Please respond and indicate why you would make such a simple mistake. Did you do it on purpose or did you just fail to do through research?

    OR am I wrong in my calculations?

  • Report this Comment On May 28, 2013, at 3:22 AM, darturtle wrote:

    ARMH falls into right business model at right time; INTC in the wrong one in mobile computing. I saw lots of discussions on technology - INTC or ARMH is better. In my view, this is not the key. It is like discussion MOT's 68030 (now FSL) or INTC's 80486 on technology. At that time, AAPL made wrong decision (not to license out Finder OS), INTC won, not on technology but due to AAPL's decision.

    Now, ARMH processors are deeply root in mobile computing. Extra efforts are required to implement new CPU. Just check that so many software failed to run on Xeperia razr i. Android software developers need to compile twice to suit both ARM CPU and INTC CPU. Many doesn't bother until chicken-egg issue is resolved.

    Second, in my view, most important. ARM business model ensure low price and multiple suppliers. After multiple chip makers design from the same core, differentiation is limited thus none can charge an INTC like premium. Also, multiple suppliers work in favor of mobile device makers.

    INTC's reaction, to me, is typical tech world business as usual-R&D, R&D, R&D more powerful products. It works while one in right business model but now INTC is NOT. Now, INTC's huge overhead works against it. R&D without addressing fundamental business model issue would bring INTC nowhere but down. I am an engineer with post graduate engineering degree but without MBA. It sounds that I rebel against my background but I have seen way too many engineering management simply believe this academic nonsense but failed to understand if they are in right or wrong business model.

  • Report this Comment On May 28, 2013, at 3:00 PM, TMFTopDown wrote:

    @stretcho44:

    According to CNET.com, IDC's definition of a tablet is as follows:

    "IDC breaks the devices down into media tablets and tablet PCs. A tablet PC has an x86 processor, runs a desktop OS, and has a screen size anywhere from 5 inches to 21 inches. Despite what it may look like, "A tablet PC is a PC," said Richard Shim, IDC analyst. "There's no real limit to them."

    "A media tablet we're defining as ARM-based, running a smaller OS (non-Windows)," he said. "The screen sizes are between 7 and 12 inches." ARM is a type of low-power processor typically used in mobile devices, whereas x86 processors are used in more robust applications where power consumption isn't as much of an issue."

    The majority of tablets on the market are media tablets and not PC tablets. Yes, they're both computing devices to the end user, but to Intel, it's a big difference.

    Thanks,

    Steve Heller (TMFTopDown)

    http://news.cnet.com/8301-31021_3-20006077-260.html

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