Intel (INTC +0.30%) is a powerhouse of a chip vendor. But in the mobile space, it has not moved as quickly as investors have hoped. While the company successfully pulled in its Bay Trail system-on-chip for both Windows and Android tablets to late 2013, this was actually planned as a 2014 launch. Unfortunately, while the chips likely were sold to OEMs starting at the tail end of the third quarter for fourth-quarter device launches, many of the devices won't become available until late Q4 or even the following quarter.
While it's great that Intel is finally on the ball with competitive products, it really needs to move faster if it is to successfully take meaningful share in Android tablets and smartphones from Qualcomm (QCOM 2.23%) and NVIDIA (NVDA 4.43%). If Intel can successfully accelerate the introduction of its next-generation smartphone and tablet processors, then 2014 could be a truly phenomenal year for the company's mobile efforts.
Let's talk tablets
Intel launched its 22-nanometer Bay Trail system-on-chip at the Intel Developer Forum, and the first devices sporting the chip have begun to roll out. However, many of the devices that have been announced with this chip, such as the Dell Venue 8 Pro and the Lenovo Miix 2, have yet to ship in any real volumes -- although they should be widely available in early November. Others, such as the Dell Venue Pro 11, don't appear to be for sale yet.
Showing up this late even on the Windows side of things is frustrating. But the real issue is that the timing of the Bay Trail launch meant that it never had a shot in the really popular, high-volume designs such as the Amazon Kindle Fire HDX and the Google Nexus 7. These are the types of wins that will get Wall Street's attention and prove that the company's chips are truly competitive.
Bay Trail missed the last major Android tablet cycle and its direct successor, Cherry Trail, will likely be too late to win the next iterations of these designs. That being said, the company's line of Android-only smartphone/tablet processors beginning with Merrifield (shipping in Q4 2013 for device launches in Q1 2014), and continuing with Moorefield (likely a 1H 2014 launch according to Digitimes), could be prime contenders for those sockets, depending on how good they are and what the launch time frames look like.
Smartphones is a trickier question
The biggest question is smartphones. Qualcomm has been moving very quickly in this space, introducing highly integrated chips from top to bottom at a blistering cadence. Today, Qualcomm's product stack consists of the Snapdragon 200, 400, 600, and 800, each at different price points, and with various stock-keeping units with different levels of integration and features. Not only does Qualcomm have best-in-class IP for every portion of a system-on-chip, it seems to be able to crank out the system-on-chip designs rather quickly. It's also not trivial that Qualcomm's relationships with these vendors seem quite good.
Intel, on the other hand, needs to really step on the accelerator to catch up in phones. In tablets, the company is closing the gap nicely. The problem on the CPU side seems to have largely been solved, and on the GPU front, its internal architecture on Windows and Imagination-licensed IP for Android tends to be more than suitable. Intel now just needs to crank out the system-on-chip designs faster and, probably more importantly, to move more quickly on the modem and RF side.
While it's frustrating for Intel shareholders to know that there's still catch-up to be done, the key thing to watch will be how quickly the company can narrow the gap and eventually reach parity. Intel is likely to score some smartphone wins with its platforms next year, but it isn't likely that the company can really vie for the high-visibility sockets until most likely the 14-nanometer generation.
Foolish bottom line
For 2014, look for the initial ramp of design wins around Intel's 22-nanometer smartphone processor, Merrifield, coupled with Intel's first multi-mode LTE modem. While this chip probably won't make it into, say, a Samsung Galaxy S flagship, it could win sockets at LG, HTC, Huawei, ZTE, and many of the other smaller players.
In tablets, while Windows 8.1 sales are always encouraging -- particularly given Intel's moat on Windows tablets -- the key thing to really look for is how well Intel can play in the Android space. After all, that's where the majority of the volume is still likely to be, particularly in emerging markets, and participation in this space is absolutely critical to Intel's long-term mobile viability.
