Intel Gets Another Chance to Prove Itself

With Mobile World Congress coming on up, Intel gets another chance at bat.

Feb 11, 2014 at 10:00AM

One of this Fool's biggest criticisms of Intel's (NASDAQ:INTC) smartphone strategy has been the company's inability to get competitive parts to market in a timely fashion. There's always been a problem, whether it's an issue with the actual system-on-chip or with the modem -- Intel was very late with its LTE modem -- and it has limited the company's traction in smartphones in a big way. At the upcoming Mobile World Congress, the company has an opportunity to prove that its smartphone efforts aren't a complete failure.

Merrifield wasn't designed for large phones
It's clear that Intel was very much aping Apple (NASDAQ:AAPL) with its next-generation Merrifield smartphone product. The design is a dual-core, likely with the same GPU block from Imagination Technologies (NASDAQOTH:IGNMF) that Apple is using in its A7 chip, although probably clocked higher. These all point to Intel trying to do a chip very much in the spirit of what Apple did with A7. Unfortunately, Intel is very much shooting behind the duck here, as the world moved on to larger phablets that support higher-power envelopes and larger die sizes.

Apple A

Source: Phandroid

That said, there's a true litmus test
Even in a world where phablets are the norm -- and it's likely that even Apple will move to large-screen phones this year -- there is still a market for small smartphones. In fact, the market is large enough that Apple still smashes records with its iPhone sales, Samsung (NASDAQOTH:SSNLF) dutifully rolls out "Mini" editions of its Galaxy S flagships, and many others still supply 4-inch-class phones. It is these phones that Intel will likely be targeting with its Merrifield platform.

Intel Silvermont Merrifield Bay Trail

Source: Intel

If Merrifield is successful, then investors should see Samsung, HTC, LG, or Motorola announcing a higher-end, but smaller device with the chip. That means unless Intel is able to show a real design win with one of these major players -- and not third-tier designs such as the Safaricom Yolo and the Xolo -- the platform will join Medfield and Clover Trail+, the two previous smartphone platforms from Intel, in the failed-design graveyard. So, keep an eye out at Mobile World Congress.

Foolish bottom line
At the end of the day, tablets will end up simply compensating for the decline in PCs, while smartphones represent the real opportunity for growth. The total addressable market is very large -- about 1 billion smartphones were sold in 2013 -- and the opportunity to drive incremental silicon value via tighter integration is very real.

With a modem, connectivity, and other goodies integrated on-board, the chip vendors can capture more value per chip sold and, thanks to a very high unit-volume market, there's a lot of revenue to be had for the companies that can afford it. Can Intel capitalize on this opportunity? In theory, the answer should be a resounding "yes," but we'll see just how far it got this year at Mobile World Congress.

The next big trend in tech is here, and you can profit
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

[Editor's note: Article was updated to reflect writer's position in IGNMF shares]

Ashraf Eassa owns shares of Intel  and Imagination Technologies. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers