Why Is Intel Partnering With a Company You've Probably Never Heard Of?

Tech giant Intel has partnered with the relatively unknown Rockchip in an effort to get its chips into inexpensive smartphones and tablets in emerging markets.

Jun 4, 2014 at 6:00PM

Intel (NASDAQ:INTC) has partnered with Rockchip, a company few know about. The partnership is the result of smartphone and tablet growth that's shifting into markets where selling prices are much lower than in most developed countries. For example, a lot of inexpensive tablets and smartphones are selling into Africa, India, and China. The shift has put Intel in a tough spot. While it'd like to capture the growth in this market, margins are squeezed and the price competition is immense. 

Yet at the same time, Intel wants to build support around Android tablets using its x86 architecture. To do so, it needs to ensure that its processors are in the cheaper Android tablets that are still seeing explosive sales growth. 

The partnership with Rockchip is Intel's way of approaching the market. Rockchip will sell a chip built on Intel's architecture, at very low price levels. Intel will probably make little money off the deal, but it gets to extend its reach into the Android tablet market currently dominated by chips based on ARM Holdings (NASDAQ:ARMH) designs. The plan dovetails with Intel's own plans to sell its chips into 40 million tablets this year. 

In the following video, Motley Fool tech analyst Eric Bleeker and Max Macaluso discuss Intel's attempt to get even a small slice of the smartphone and tablet market, especially in emerging markets, with partnerships like this new one with Rockchip.

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Eric Bleeker, CFA, has no position in any stocks mentioned. Max Macaluso, Ph.D., shares of Apple. The Motley Fool recommends and owns shares of Amazon.com, Apple, and Intel. 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.

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. 

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Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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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