Intel Missed the Mobile Market

Life doesn't have save points like a video game, nor mulligans like a friendly round of golf. Neither does business.

I think Intel (Nasdaq: INTC  ) CEO Paul Otellini wishes for a quick do-over right now. Speaking at the Council on Foreign Relations conference this week, Otellini ruefully discussed the topic of mobile processors: "I wish we had started earlier."

In light of rampant smartphone sales, and the possibility that handheld computers might largely replace desktops and laptops somewhere in the next decade, that makes sense. You almost feel sorry for Otellini. Intel has largely stayed on the sidelines, watching Texas Instruments (NYSE: TXN  ) , Qualcomm (Nasdaq: QCOM  ) , and Samsung carve up the mobile market among them with implementations of technology from ARM Holdings (Nasdaq: ARMH  ) . Intel's Atom line is doing fine in netbooks, but it's hardly made a dent in the smartphone market.

But you know what? Don't cry for Intel, because Otellini brought this on himself. More than just missing out, Otellini was Intel's CEO when the company unloaded its XScale line of ARM chips to Marvell Technology (Nasdaq: MRVL  ) back in 2006. The company backed out of the mobile market quite intentionally to bear down harder on server and PC chip rival Advanced Micro Devices (NYSE: AMD  ) , which was stealing market share from Intel left and right with its then-fresh 64-bit architecture.

That was your own choice, Paul. Don't complain now.

Intel is pouring lots of research into getting Atom fit for the mobile battle now, but it missed out on the first couple of years of the smartphone rebellion. It's never too late to join the bandwagon, I guess, but Intel can never take the first-mover advantage away from ARM and its many licensees.

Does Intel have a shot at mobile leadership, or did that ship sail already? Discuss in the comments below.

Intel is a Motley Fool Inside Value recommendation. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Intel, Marvell Technology Group, Qualcomm, and Texas Instruments, mostly by way of our 11 O'Clock Stock series. Yeah, we love us a bag of assorted chips. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On October 06, 2010, at 1:36 PM, TEBuddy wrote:

    Maybe if Intel wasnt so focused on running AMD out of business with illegal practices they could have competed in the mobile market. It is never too late for the next best thing to be released. Until Intel or AMD can make something that runs on less than a watt they arent going to be part of the smartphone world. That may come soon, but it wont be a X86 cpu, but another thing like people already make with ARMH intelectual property. They wont be able to distinguish themselves in that market at this time.

    What will be the next best thing is tablets and ultra small 10-11" laptops that have the computing power of a 15-17" notebook. Thats like a large netbook, but actually has some grunt to it. AMD is working hard to fill that space, and Intel is following. So AMD will enter a new market and Intel will be raising its game in it. Competing for the smartphone market would be brutal for either of them.

  • Report this Comment On October 06, 2010, at 2:25 PM, muddlinthrough wrote:

    http://www.wired.com/gadgetlab/2010/05/intel-atom-smartphone...

    Moorestown, May 2010, re: "Until Intel or AMD can make something that runs on less than a watt they arent going to be part of the smartphone world. " 21milliwatt standby/151milliwatt web-browsing.

  • Report this Comment On October 06, 2010, at 3:02 PM, snowfreeze wrote:

    I wsan't sure whether to write Intel OUTside, Intel is as stupid does or Stupid is as Intel does...

    LOL!

    :)

  • Report this Comment On October 06, 2010, at 3:03 PM, austec wrote:

    Otellini is more of a strategist than a technologist. He refined Intel's worldwide monopoly scheme and forgot that innovation still matters.

    All of the growth is not in super-portable tablets, smart phones and sub-11" laptops. AMD is going after the sub-11" laptops and tablets with Ontario and Zacate; consumers want great graphics and long battery life.

    However, it is HIGHLY LIKELY that INTEL IS STILL BRIBING AND COERCING MANUFACTURERS AND RETAILERS NOT TO BUY AMD PARTS. Otelini has absolutely nil respect for AMerica's laws.

    Intel is "EVIL INSIDE" ... and apparently more evil than they are creative.

  • Report this Comment On October 06, 2010, at 3:04 PM, austec wrote:

    Err.. I mean "the growth is NOW in super-portable tablets..."

  • Report this Comment On October 06, 2010, at 7:46 PM, kabooki2000 wrote:

    @austec: Really, "Intel is Evil", and coerced the top 3+ industry PC manufactures/retailers. Have you ever really thought about the fact that logically is not possible. PC manufactures/retailers can choose who they want to buy parts from, Intel goes to them and asks them to buy Intel products and hopes they say yes, and at the highest price the market will bear, so offers incentives just like any other intelligent, for profit business would, to increase the odds of sales success from a PC manufacturer to buy from Intel. Intel is not evil, Intel is just doing smart business. AMD has made it's own bed to lay in, so don't cry for them, and don't hate Intel for being successful.

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