To say that Intel (Nasdaq: INTC ) is resting on its laurels because it is only spending $5.6 billion on research development (as opposed to the $5.9 billion it spent the previous year) is the equivalent of saying Tiger Woods is getting lazy because he only golfed 28 days this past month instead of the 30 he played the month before.
A quick review of Intel's R&D efforts will reveal that this slight decrease in activity isn't having any appreciable impact on the development of new products. For instance, following on the heels of its Penryn chip introduction later this year, management has indicated that Nehalem, its next-generation 45-nm Hi-K micro-architecture, will be in production by mid-2008.
Later next year, it then expects to release the next Itanium, codenamed "Tukwilla" -- a quad-core processor manufactured at the 65nm processing node that will have twice the performance of its dual-core Itanium 2 processor. And following that, in 2009, Intel expects to leapfrog the 45nm stage altogether and go straight to the 32-nm level. Such advances are going to keep the pressure on Advanced Micro Devices (NYSE: AMD ) .
In addition to these new technologies, the company's researchers are working on everything from energy-saving technologies and gesture recognition technology to an 80-core chip prototype and a chip to prevent online gamers from cheating. Why, it's even developing processors to help enable the creation of a driverless car.
To be sure, not all of the timelines will be met, nor will every product be a commercial hit; but what Intel can't successfully invent it can always buy. To this end, just the other day, Intel Capital -- the company's venture capital arm -- announced a $218 million investment in VMware, a leader in the development of software for virtualization solutions. And with over $9 billion of cash on hand, Intel is well situated to do whatever is necessary to keep it competitive.
This flexibility, in combination with the aforementioned products that are already in the pipeline, has convinced me that, if anything, Intel isn't resting on its laurels. Rather, it is more closely abiding Andy Grove's old motto: "Only the paranoid survive." That attitude should give investors yet another reason to be bullish about its future prospects.
Wait! You're not done with this Duel. Go back and read the other arguments, then vote for a winner.
Fool contributor Jack Uldrich owns stock in Intel. Intel is a Motley Fool Inside Value pick. The Fool has a strict disclosure policy.
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