Intel Corporation's Smartphone Efforts Are Still Coming Up Short

Intel's apparent inability to garner meaningful smartphone design wins with its most recently announced Merrifield/Moorefield platforms is discouraging, but how material is it to the investment thesis?

Jun 24, 2014 at 9:02AM

While Intel (NASDAQ:INTC) is well known for being late to the mobile game, it has been fighting with a vengeance to get caught up. It's not easy competing with juggernauts like Qualcomm (NASDAQ:QCOM), which not only have a technical lead in mobile, but have the customer relationships and understanding of just what the customers want. That said, Intel's product lineup -- in particular for smartphones -- still needs some work before it truly has a chance of fighting the likes of Qualcomm for meaningful design wins.

It's not about the CPU core
A lot of people like to think that if Intel were to simply license processor designs (or the instruction set architecture to build its own processor) from ARM Holdings (NASDAQ:ARMH) that this would fundamentally remove the barriers keeping Intel from participating in this $18 billion (and growing) market. This actually isn't the case. The strongest part of Intel's current mobile lineup is the company's custom-built Silvermont CPU core.

Indeed, in my prior analysis, you can see that in real-world, CPU-limited tasks, Intel's Atom Z3580 -- which features four Silvermont cores running at 2.33 GHz -- compares favorably to quad core Krait 400 and Krait 450 cores from Qualcomm:


Source: AnandTech, Intel.

So, if the CPU performance is strong and licensing ARM wouldn't fundamentally change the equation, then what's the problem here?

Modems, integration, and time-to-market
When it comes to the smartphone chip market, platform cost and "smartphone-related" feature integration are key considerations for any device vendor. Intel's products are fine from a compute/graphics perspective, and while Intel's imaging/camera technology currently trails Qualcomm's, what Intel has today is still good enough for the vast majority of phones.

The problem, of course, is in the modem (specifically, the fact that it's not integrated into the apps processor) as well as the time-to-market for Intel's smartphone platform solutions.

For example, Intel's Moorefield (Atom Z3580) compares very favorably to the Snapdragon 801 in terms of compute performance, but it doesn't have a competitive modem built in.

This wouldn't have been a deal-killer if the company's discrete XMM 7260 LTE-Advanced modem had been ready to go along with the apps processor, but it appears that XMM 7260 is slightly late and XMM 7160 (the currently available LTE modem from Intel) just isn't competitive with Qualcomm's integrated solution. There are a lot of parts that a company needs to get right to deliver a competitive applications processor solution. 

Can Intel get it right?
Intel has the massive R&D budget and the technical prowess to become much more competitive in this market. However, the company needs to better align its product release cycles to coincide with the launch of significant smartphones if it is to have a hope of winning these designs. Additionally, it needs to more aggressively design these chips to the specification that the handset vendors want.

These are all issues that Intel's management team has acknowledged, but it is unclear as to how quickly Intel can realign its product roadmaps to better suit the market. The company has promised its SoFIA products (integrated 3G/LTE and apps processor) aimed at the very low end of the market for the first half of 2015.

This will help, but remember that Intel will be building these chips at TSMC and won't transition those products internally until early 2016. Further, Intel's expertise in computing really lends itself well to parts of the market where performance matters (i.e. mid-range and high end), so a presence there sooner rather than later would be ideal. 

Foolish bottom line
At this point, it looks as though Intel's next chance to make a play for the mid-range and high end will come with the firm's new platform codenamed Broxton scheduled to hit the market during the second half of 2015. Given that Intel "launched" Merrifield and Moorefield in February and the first designs will trickle out in July and August for these platforms, respectively, expect that Intel's Broxton will be targeted at smartphones hitting the market in the first half of 2016.

Only time will tell if this will be the part that finally puts Intel on the map or if it, like Medfield, Clover Trail+, Merrifield, and Moorefield before it, simply arrive to the market too late and/or without the necessary features to truly make a mark on this market. 

Like Intel in the 90's, this stock could be poised for serious growth
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Ashraf Eassa owns shares of ARM Holdings and Intel. The Motley Fool recommends Intel. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers