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Intel’s Trump Card

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During the first quarter of 2014, Intel (NASDAQ: INTC  ) is slated to launch its next generation system-on-chip platform for smartphones known as Merrifield. According to estimates based on Intel's statements at its recent investor day meeting, this platform will be a solid performer (at what is likely to be great power consumption), but it will probably slightly lag (in terms of peak performance, not necessarily sustained performance) the best from Qualcomm (NASDAQ: QCOM  ) at the time.

More importantly, Qualcomm's top-end chip is marketable as a quad core processor while Merrifield sports a dual core. While this does look like a marketing "disaster," Intel has one trump card that it can play to completely turn the marketing tides.

64-bit is the new buzzword
When Apple (NASDAQ: AAPL  ) announced that its A7 chip in the new iPhone 5s was 64-bit, it seemed that the race to "64-bit" was on. Samsung was out claiming that it would have a 64-bit phone next year, and Qualcomm even went so far as to tout its low-end 64-bit chip (fully cognizant of the fact that the company is throwing its higher-end, higher-performing chips under the bus). In short, the majority of the handset vendors were in a frenzy to get 64-bit parts out the door as soon as possible.

Intel has 64-bit, but can it capitalize?
Intel has long been viewed as a "laggard" in the smartphone chip space, and this view isn't off-base. However, the nice thing about this frenzied rush to 64-bit is that Intel's mobile processors are all 64-bit capable today. The only hurdle to shipping handsets and tablets with this 64-bit marketing point has been operating system support. Android, the operating system with over 80% global market share, is currently a 32-bit operating system.

Now, it seems from Qualcomm's announcements (rushing to announce a low end 64-bit chip that won't actually ship until the second half of 2014) that Intel will be the lone provider of high-end 64-bit smartphone chips for most of, if not all of, 2014. If Intel can capitalize on this marketing point next year with some of the partners that it has been very public about (Lenovo, Motorola/Google), then Intel could gain a real marketing advantage.

It's all about Android-64 at this point
Intel's hardware already implements a 64-bit version of the x86 instruction set, so the question comes down to software support. Intel already shown off its current generation tablet chip, known as Bay Trail, running a 64-bit version of Android. Although it's probably not yet ready for commercial deployment, the odds are good that Intel will try to enable a number of key partners (such as Google) to launch the "world's first" 64-bit Android devices. If Intel can pull this off, then not only does it gain an interesting marketing point, but it could also help the company establish X86 as an important architecture on Android.

Foolish bottom line
Admittedly, Intel probably won't have an incredibly large window of opportunity to capitalize on the 64-bit "craze," but if it can get a year's head start and some design wins thanks to this opportunity, this helps to clear the path to more design wins going forward as Intel's product lineup improves.

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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 December 19, 2013, at 3:55 AM, zippero wrote:

    Intel and Samsung say they'll come out with a 64-bit Tizen next fall, which is earlier than Google will ever come out with a 64-bit Android OS. Google is more concerned with putting 32-bit KitKat on more low-spec phones with minimal RAM in order to reduce Android's fragmentation problem. Google's priority is reducing fragmentation at the low-end, not trying to keep up with 64-bit Apple on the high end. If Google came out with a 64-bit Android OS, only some single-digit percentage of Android phones would even get it after a year. It would actually increase fragmentation, and reducing fragmentation is Google's priority now. It makes no sense to introduce a 64-bit Android OS when most Android phones around the world are cheap, low-spec sub-$200 phones that lack the minimal RAM requirements to run a 64-bit Android OS.

  • Report this Comment On December 19, 2013, at 11:13 PM, rocket7777 wrote:

    Only thing 64 bit android would do is eat up more battery for normal usage and barely bench-able performance gain for 3D games.

    Only time it makes difference is probably around 5 years from now and mram replaces dram.

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