Acer Kicks Intel Out of Its Smartphones for 2014

Acer, Intel's long-term partner in PCs, just publicly announced that it had no intentions of releasing LTE-capable phones with Intel Inside this year.

Apr 19, 2014 at 6:00PM

Intel's (NASDAQ:INTC) low-power CPU cores have become pretty good over the past several years. However, its products have typically lacked certain functionality aspects -- such as integrated cellular baseband -- that make them largely uncompetitive against chips from Qualcomm (NASDAQ:QCOM) and MediaTek.

That means it's been extremely difficult for Intel to gain traction in the smartphone market. And now Acer looks as if it will make establishing that traction all the harder.

The Liquid C1 from Acer, powered by Intel
In early 2013, Intel launched a cut-down, budget-oriented smartphone platform known as the Z2420. This was a performance-reduced iteration of the Atom Z2460, running at 1.2 GHz rather than at 1.6 GHz, and one of the few smartphones that actually utilized this platform was the Acer Liquid C1.

Acer Liquid C

The Acer Liquid C1, one of the first (and only) phones to use Intel's Z2420. Source: Acer.

The Liquid C1 was a solid, low-cost Android device, and the performance of the Intel chip inside it was quite respectable in its day, although competing low-end smartphone chips like the Qualcomm Snapdragon and some of the MediaTek parts were better integrated and offered better performance. That said, it seemed that this was a "pipe-cleaner" for future designs with much better Intel silicon.

Or maybe not
Unfortunately, since Intel failed to deliver competitive solutions in 2013 and, apparently, 2014, the company has publicly stated that it has no plans to launch LTE smartphones powered by Intel in 2014. While this is disappointing, it isn't all that surprising, given the following slide from Acer, leaked about a year ago:

Acer

Acer admits that Qualcomm and MediaTek are the only two chip vendors worth using. Source: DailyTech. 

Notice how Acer refers to Qualcomm's offerings as "best-in-class technology" and MediaTek's products as "leading technology with TTM at affordable pricing"? Then next to those two, there is some wishy-washy nonsense about a "unique user experience though IT background and historical partnership," followed by an admission that this is a "strategic play" only. In short, Acer thought Intel's 2013 lineup was inadequate, and with the statement it recently made, it apparently thinks that about its 2014 lineup, too.

All signs point to Merrifield failure
This all comes back to the point I've been making that Intel's Merrifield platform (dual core, launched at Mobile World Congress 2014) will probably see minimal traction. If even Intel's own partner in PCs and tablets will publicly state that it doesn't want to use Intel's chips in phones this year, then obviously something is seriously wrong with the currently available platforms on price, performance, and features.

Intel completely missed its shot at the 32-nanometer generation and, after touting its manufacturing lead, seriously fumbled the 22-nanometer generation. Intel will get another shot with the 14-nanometer Broxton part, but if this can't gain traction, then even the most ardent long-term Intel bulls will begin to lose faith in the company's ability to execute in mobile. But hey, we can hope that the massive losses Intel is incurring in mobile will eventually pay off, right?

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple and Intel and owns shares of Apple, Intel, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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