Intel Corporation’s Bay Trail Is Still Missing in Action on Android

It's now April and Android tablets powered by Intel's Bay Trail processor are still impossible to buy.

Apr 16, 2014 at 3:30PM

After Intel's (NASDAQ:INTC) earnings call earlier this week, it's clear that the company's prospects have turned a corner. The PC market appears to be showing signs of continued bottoming, the data-center group has returned to double-digit growth, and the company even shipped 5 million tablet processors during Q1. But a big question that still remains, and one that investors didn't really get a satisfactory answer to on the call, is: Where are all of the Bay Trail Android tablets?

Intel's still shipping mostly 32-nanometer tablet chips?
On Intel's most recent earnings call, CEO Brian Krzanich noted that 80-90% of the tablet chips that the company shipped in the quarter (and likely plans to ship during 2014) are for Android-based systems. Given that Bay Trail (the company's 22-nanometer tablet processor) is not yet available in any Android-based systems, we come to the conclusion that Intel shipped about 4-4.5 million older, 32-nanometer tablet processors during the quarter.

Not only does this mean that Intel's Bay Trail-T isn't exactly shipping in large quantities, but it also serves to illustrate that perhaps Microsoft (NASDAQ:MSFT) Windows 8.1-based tablets aren't selling all that well (since most Windows tablets are powered by Intel). The lack of Bay Trail-based Android tablets is particularly troubling given that the platform launched -- with alleged Android support -- back in September 2013.

Bay Trail needs to hit Android fairly soon
Intel seems confident that it can ship 40 million tablet chips during 2014, and at the investor meeting seemed to indicate that the vast majority of these tablets would be Android based and not Windows based. This means that Intel is expecting a pretty sizable ramp in Bay Trail-powered Android tablets in the marketplace during Q2 and Q3.

From what we know so far, it looks like Intel is going after players in the China Technology ecosystem. Further, while Intel seems to have lost the Galaxy Tab socket at Samsung (NASDAQOTH:SSNLF) this round, Intel is probably going to rely on its more traditional PC OEM partners, such as ASUS and Acer, in order to drive volumes. While these names aren't as well-known as Samsung, they -- along with Intel -- are well-known brands in the PC space, which should help drive sales.

The gross margin impact kicks in during Q2, but gets worse in Q3 and Q4
Intel expects the contra-revenue associated with tablets to impact gross margins negatively by 0.5% in the coming quarter, but expects the full-year impact to be about 1.5%. This suggests that the Bay Trail ramp on Android doesn't really kick in until Q3 and Q4. But what's even more interesting is that Intel expects that bill of materials engineering will bring down the impact on a per-unit basis significantly by the end of the year.

This suggests, then, that the ramp really begins in Q3 and gets even more aggressive in Q4, as lower contra revenue per unit is offset by much higher volumes leading to the ~2% impact in these quarters. Of course, this suggests that Intel is expecting some pretty serious Android volume during these quarters as it's clear that Windows 8.1 tablets probably aren't going to be robust enough to make up most of that 40 million unit volume.

Foolish bottom line
Google's (NASDAQ:GOOG) Android is clearly the most important mobile operating system in the market today and it is good to see that Intel is embracing that trend. While it would be nice to see some of the Bay Trail Android design wins come to market sooner, it is clear from the numbers that Intel gave on the call that if Intel is to hit its 40 million unit target, it's going to need to do it with mostly Android this year.

Think tablets are old hat? Get in on the Next Big Thing!
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.


Ashraf Eassa owns shares of Intel. The Motley Fool recommends Google-Class C Shares and Intel. The Motley Fool owns shares of Google-Class C Shares, Intel, and Microsoft. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

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.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

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. The show is also heard weekly on dozens of 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. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers