Watch for Intel Corporation to Outline Its Smartphone Plans at Computex

To succeed financially in mobile, Intel must do well in smartphones. At the upcoming Computex trade show, watch for Intel to offer further details about its upcoming product lineup for that segment.

May 31, 2014 at 7:30AM

It has been encouraging to see Intel (NASDAQ:INTC) become aggressive in pursuing the tablet market. It would have been nice to see that happen earlier, particularly as the company -- by CEO Brian Krzanich's own admission -- was in denial that tablets were cannibalizing PC sales. However, the elephant in the room is the company's smartphone effort, which continues to suffer from execution problems. 

With Computex, one of the biggest tech trade shows in the world, fast approaching (it takes place from Jun. 3-Jun. 7), investors should listen closely to Intel's keynotes and presentations for any updates that the company can provide on its smartphone strategy. 

Intel didn't win a single major design with Merrifield
The brand-name handset vendors that matter -- HTC, Samsung (NASDAQOTH:SSNLF), LG, and Motorola -- have all more or less chosen Qualcomm's (NASDAQ:QCOM) Snapdragon 800/801 processors for their next-generation high-end smartphones. This was mostly expected, as Intel's high-end solutions still aren't really competitive with what Qualcomm offers today.

The real failure on Intel's part is that it struck out on the "Mini" variants of every single flagship smartphone. The HTC One Mini 2? That went to Qualcomm's Snapdragon 400. The LG G2 Mini? That also went to the Snapdragon 400 for the widely distributed models, along with NVIDIA's (NASDAQ:NVDA) Tegra 4i for some foreign models. How about the Samsung Galaxy S5 mini? It's not official, but from the spec leaks that looks like a Snapdragon 400 design, too.

How did Intel's Merrifield platform -- which offers strong graphics and CPU performance, as well as a capable discrete modem -- fail to win any of these designs?

Pick your poison: availability, integration, cellular capability
There are three likely reasons that Intel may not have won those designs:

  • Merrifield was simply unavailable for the time frame of those designs. The platform was launched in February, while the Snapdragon 400 was available much earlier;
  • The XMM 7160 paired with Merrifield isn't as featured as the MDM9x25 block integrated inside of the Snapdragon 400 (Qualcomm's platform features carrier aggregation and CDMA support, while the 7160 does not); or
  • The lack of integration on the part of the Merrifield platform drove a platform bill of materials that was simply too expensive, leading the OEMs to choose the Snapdragon 400 for total cost reasons.

Whatever the reasons are, it is unfortunate that Intel wasn't able to win those designs. The Silvermont CPU core, the Imagination GPU block, and the very nice 22nm FinFET transistors would have made a stunning showing in terms of performance and power for more compute and graphics-oriented applications -- but of course smartphones require more than that. 

SoFIA may fix this
While I am personally looking for Intel's 14-nanometer Broxton part to start winning sockets at the high end, the real growth in handsets (and the segments where the device vendors are less likely to want to roll their own silicon) is in the low end and midrange. This is where Intel's SoFIA processor -- which integrates a cellular baseband in the main SoC -- should remedy that deficiency. Furthermore, since this will be a Silvermont-based product, it should also offer good performance (although it remains to be seen what graphics processor Intel integrates).

While Broxton may arrive too late to win the round of high-end phones that will come at Mobile World Congress 2015, the SoFIA products should arrive on time to compete for the "mini" versions of these products. For the first time, Intel will actually have products that can compete from all perspectives with the low-end chips from Qualcomm, MediaTek, and others. This by no means guarantees success, but Intel should be in a better position in smartphones than it has ever been.

Foolish takeaway
Ultimately, Intel's massive investment in mobile cannot be paid off simply with tablet chips -- it needs to do well in smartphones in order to bring this division to profitability. While only time will tell if Intel is successful, it does seem that for the first time since the company began its mobile adventures, it is taking a customer-centric view rather than building what it believes is the "right" product. And that mentality could mean all of the difference in the world.

Leaked: Apple's next smart device (warning, it may shock you)
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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel and Nvidia. The Motley Fool owns shares of Intel and Qualcomm. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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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