Chipmaker Atmel (NASDAQ: ATML) has some pretty strong long-term catalysts. The company, which makes microcontrollers used in touchscreen applications, is putting its hopes on the Internet of Things, a bump in sales of Microsoft's (MSFT -1.84%) Windows PCs, and the growing adoption of Google's (GOOGL 0.35%) Android tablets. However, Atmel's recently released fourth-quarter results make it look like a company that's not expected to see rapid growth in the future.

Failing to deliver
Atmel's revenue was up just 2% year over year to $353.2 million in the fourth quarter, missing consensus estimates of $357.4 million. Also, its earnings of $0.10 per share lagged the Street estimate of $0.11 per share. Moreover, Atmel's guidance for the next two quarters left a lot to be desired, leaving an impression that the company isn't benefiting from the tailwinds that it expected to.

Atmel stagnated in 2013, with revenue coming in at 2012 levels. The company saw growth in its core microcontroller business, but this was offset by weak performances in other segments. But, Atmel expects its different end-markets to pick up this year as the PC market stabilizes, while the continued growth of Android-powered tablets should lead to sustained growth in microcontrollers.

Product development moves
Atmel has made aggressive product development moves in microcontrollers. It had introduced more than 125 new core 32-bit microcontroller products last year, while also launching ultra-low power microcontrollers for sensor hub and battery-operated consumer applications. Atmel is also focused on releasing advanced microcontroller products for automotive systems, and this shows in the fact that it had showcased a console featuring its maXTouch and XSense technologies recently.

Considering such moves, it is quite easy to see why Atmel saw 40% growth in core 32-bit microcontrollers in 2013. Also, the company has made enhancements to its products to support industrial applications, medical electronics, wearable devices, and the Internet of Things. 

Atmel management believes that they have "one of the industry's most extensive portfolios of technologies for IoT applications." Atmel's ultra-low power microcontrollers, wireless connectivity solutions, and security solutions will probably help the company in tapping this emerging industry, and the company has already made some notable moves in this arena. Atmel uses the ZigBee platform for its IoT products, and its flagship design has already been used in Philips' popular Hue lighting system.  

This year, Atmel aims to bring several new and efficient turnkey IoT solutions in an effort to "simplify our customers' product development and enhance their time to market." Cisco has put the size of the Internet of Things at $19 trillion, and it is quite understandable why Atmel is upbeat about this opportunity.

Mobile devices to fuel growth
Also, Atmel is quite positive about the prospects of Ultrabooks and Google's Chromebooks. The company claims to have landed several design wins in these two devices. In 2013, Chromebooks saw rapid growth and accounted for a fifth of total laptop sales in the U.S., according to NPD. Quite clearly, Google's Chromebook came into its own in 2013, with Microsoft going after the device with a dedicated Scroogled website. Moreover, according to Amazon.com's stats, two of the three best-selling laptops on the e-retailers' website during the holiday period were Chromebooks. 

Atmel finds itself at the heart of Chromebook growth with its touchscreen controllers, but this is not the only Google-powered device that's expected to drive growth. Atmel claims to be the largest supplier of touchscreen controllers for both Android and Windows 8 and 8.1 systems, which is why it is expecting robust growth as these platforms gain traction. 

In 2014, Gartner expects sales of Google's Android devices to exceed 1 billion, primarily driven by sales of tablets and hybrid devices.  The tablet market is expected to grow 47% this year, with Android tablets expected to capture more than 60% of the market once again. Since Atmel counts Samsung -- the largest seller of Android tablets -- as a client, its job of benefiting from the growth of the tablet market should become easier. 

Additionally, IDC expects Microsoft's Windows tablets to gain market share this year. The Windows platform should see a bump in market share from 3.2% last year to 5.7% this year as the Microsoft Surface and the Surface 2 continue to gain steam.

Apart from these, Atmel has several other important clients. It is recording design wins at Tier 1 smartphone customers for mid- to high-end smartphones; its maXTouch is also powering Sony's PlayStation 4 wireless game controllers; the maXTouch solutions are also being adopted by automakers in Europe, North America, and Asia. In fact, Atmel's maXTouch revenue for automotive applications had quadrupled in 2013. 

The bottom line
In the short run, poor results and a weak guidance make Atmel unattractive. However, its long-term prospects look quite promising. Opportunity in the Internet of Things, the automotive market, and mobile computing should help Atmel do well going forward. Also, at a forward P/E of just 13, Atmel looks cheap, making it an ideal bet for long-term growth at a reasonable valuation.