Here's How Intel Just Solved Its Biggest Chromebook Problem

Intel (NASDAQ: INTC  ) recently hosted a press briefing, hosted by Intel's Navin Shenoy, VP and GM of the company's mobile computing group. The purpose of this event was to announce the following:

  1. Intel has been working very aggressively with Google (NASDAQ: GOOG  )   (NASDAQ: GOOGL  ) and various hardware OEM partners to bring a wide swath of Chromebooks based on Intel's processors to market; and
  2. It would be bringing its Bay Trail-M (initially targeted for low-cost Windows systems) to Chromebooks, finally enabling fan-less designs similar to some of the ARM (NASDAQ: ARMH  ) -based SoC Chromebooks.

In this article, it's worth digging a bit into just why Intel is pushing aggressively onto Chrome and how the company's recent actions and announcements position it in this market segment going forward.

The Samsung Chromebook disruption
When Samsung (NASDAQOTH: SSNLF  ) released its very first Exynos-powered Chromebook, it was quite a beauty sporting a nice display, small but fast storage, and a low-power system-on-chip capable of driving a fan-less machine. While in terms of sales volume it wasn't particularly disruptive, it was only a matter of time before the concept would serve to disrupt at least a portion of the low end of the PC market.

Chromebooks are proving among the most popular of notebook PCs among consumers. Source: Amazon.com.

In light of the clear secular headwinds in the PC space to begin with, losing significant share to ARM-based Chromebooks was likely not a headache that Intel wanted to deal with. In response, Intel began partnering with some of its key PC OEM friends (for example, Acer) to put its lowest-bin Celeron processors into these machines. These chips were faster than the fastest ARM-based chip at the time, but, unfortunately, that's where Intel's advantages at a technical level ended.

Sandy Bridge, Ivy Bridge, and Haswell take a stab at Chrome
Back in 2012, shortly after Samsung's disruptive little Chromebook hit the market, Intel and Acer rushed out the Acer C7 Chromebook. This was powered by the Intel Celeron 847 processor, which was a 32-nanometer "Sandy Bridge" chip that was as bottom of the barrel as it got for Intel processors at the time. Performancewise, it was much faster than the Exynos chip, but as far as power consumption and battery life went it wasn't even in the same ballpark as the Samsung solution .

The Celeron 847-based Chromebook was fast, but battery life suffered. And, hey, look at those vents! Source. Newegg.com.

Intel followed this up by putting Ivy Bridge in the Chromebook Pixel, an obscenely high-end Chrome device that likely didn't sell all that well. However, the next major step was to put Haswell (which brought substantial platform power and battery life improvements) into even dirt-cheap Chromebooks. The performance of these devices was well ahead of the ARM based products, and the battery life was much improved, but these chips still weren't low power enough for fan-less devices.

Bay Trail-M is Intel's savior on Chrome
Fortunately, as a result of the development work that Intel has done for its mobile processors, Intel built Bay Trail-M -- based on the low-power Atom "Silvermont" cores -- for low-cost Windows PCs. These consumed little enough power to enable fan-less systems, and they're cheap enough to build so that Intel can not only attack Chrome with the right performance/power product but do so with an excellent cost structure.

Intel's Bay Trail-M offers lower power and a good cost structure for cheap PCs. Source: Intel. 

Sure, a Bay Trail-M isn't going to offer the performance of a Core i3 processor, but for people looking for inexpensive, fan-less secondary or perhaps even tertiary devices, this is the right "fit." Remember that Intel was selling full-blown (albeit lower-bin Celeron and Pentium class parts) Haswell-ULT chips into $199 Chromebooks, so replacing those parts with much cheaper-to-build, lower-power Bay Trail-M parts is a win/win, especially since Intel was probably compromising on margins to win those Chrome sockets away from the ARM vendors.

Is Chrome really that important?
The next question -- and perhaps the more philosophical one -- is whether Chrome is actually all that important a market for Intel. The simple answer is that is yes. There is a certain degree of cannibalization of very low-end Windows 8.1 systems in favor of Chrome systems, so if Intel didn't go after that business, however large or small, that would simply be exposing a crack in its core business (and remember, PCs aren't exactly a growth market so share loss is particularly painful).

Intel needed to thwart any ARM-based incursions into the PC market, and since the same tools it uses to try to win in mobile apply here, doing the legwork on the software side of things and getting its traditional crew of PC OEM partners to flood the market with Intel-based Chrome devices seemed a very low-risk/high-return move.

Foolish bottom line
Only the paranoid survive, according to former Intel CEO Andrew Grove, and in embracing the Chrome market full-on, Intel is being very paranoid. Intel has "won" Chromebooks, so whether Chromebooks take share from Windows 8.1 PCs or not, Intel is well positioned. Just as it needs to be. 

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Read/Post Comments (8) | Recommend This Article (5)

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 May 09, 2014, at 10:48 AM, GameBot wrote:

    This is entire is much to do about nothing.

    Chromebook , is way under 1% of sales....

  • Report this Comment On May 09, 2014, at 12:12 PM, anrbfan wrote:

    ChromeBook's biggest problem is not hardware. It is software.

  • Report this Comment On May 09, 2014, at 12:43 PM, H2323 wrote:

    ya, they are very cheap for a reason, on functionality. The only person I know with a chrome book has a mac as well to do work, kinda stupid device.

  • Report this Comment On May 09, 2014, at 5:09 PM, Mike655mm wrote:

    I've been an electric engineer in the computer business for almost 40 years and bought my first computer (an Apple II) in 1980 and used x86 desktop PCs and laptops since then. Until I retired last year, I worked at Intel in Oregon for the last 15 years.

    After the last Java exploit burned me, I got fed up playing the anti-virus game and bought the $180 ASUS Chromebox for all my basic internet & email needs. It's been nothing short of amazing. With its 22nm Haswell-based dual core Celeron cpu, it's really pretty snappy and only consumes about 10W.

    I'll still use my high-end 3.4Ghz 6-core Intel Gulftown cpu beast offline for anything needing real muscle or Microsoft specialty software, but for 95% of what I do, it'll be on this Chromebox & I'm getting my daughters thin & light Chromebooks for school

  • Report this Comment On May 09, 2014, at 5:24 PM, tabitha147 wrote:

    Unbelievable how many Chromebook models there are: http://bit.ly/NewChromebooks

  • Report this Comment On May 09, 2014, at 6:13 PM, cdkeli wrote:

    Does anyone actually think ARM is quaking in their boots? Intel plans to spend US$100 million to fund Chinese product development in PCs, mobile devices and wearables.

    On Thursday, Eul called on Chinese vendors to partner with Intel on building and selling tablets. The U.S. chip maker has access to over 140,000 retailers and resellers across 150 countries.

    Perhaps Intel should retool their motto:

    "China inside"

  • Report this Comment On May 09, 2014, at 9:42 PM, TEBuddy wrote:

    Well, Google will be disappointed with Intel and break any deal they have considering AMD makes better low power processor solutions. Or at least OEMs will see the light when AMD sells more cheap platforms with free windows that will run and Android app better than Intel's chromebooks.

  • Report this Comment On May 10, 2014, at 8:15 PM, cri33 wrote:

    So it's Chinese inside . All the pc laptops made these day are made in China too and they still sell.

    TEBuddy ..I don't think so unless you have insider information.

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