Acer Kicks Intel Out of Its Smartphones for 2014

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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.

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 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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Read/Post Comments (4) | Recommend This Article (1)

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  • Report this Comment On April 19, 2014, at 9:18 PM, biswajeets wrote:

    Intel doesn't need success in phones to succeed in mobile market. Intel will get to phones sooner or later. The current strategy they have in mobile space is the right approach. If they can get significant market share in tablet space, that should kick start another dominance to look forward to. Remember, how Intel got into server market space... History will repeat...

  • Report this Comment On April 20, 2014, at 7:11 AM, JeffreyHF wrote:

    If you truly think the server market is comparable to the mobile supply chain, there's not much we can agree on. Intel's dominant PC position will never be repeated in mobile, no matter how much money candy they lavish upon device makers, partly because of how they controlled the PC space, and partly because of their skeletal offerings.

  • Report this Comment On April 20, 2014, at 9:23 AM, will1946 wrote:

    I wonder what intel's strategy or even tactics are regarding mobile. If they have as their strategic aim to lose tons of money, they are right on track. I think more and more that qualcom is mobile and intel is pc.

  • Report this Comment On April 20, 2014, at 7:37 PM, techy46 wrote:

    Intel will get 40m tablet wins in 2014 with Atom 22nm and then 2015 will provide for 14nm smart phone and tablet wins. All Intel investors already are aware that 2014 is the ramp up to mobile 14nm chips in 2015. That OK because Intel has the free cash flow to invest in mobile, pay dividends and maintain moat around PC's and servers.

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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