The tablet chip industry has become hyper-competitive in recent years. While Qualcomm (NASDAQ:QCOM) commands the high-performance tablet chip segment, downmarket offerings from Allwinner and MediaTek have practically captured the sub-$150 tablet space. Now, Advanced Micro Devices (NASDAQ:AMD) is looking to establish itself with its upcoming Beema and Mullins processors.
Amid this intensifying competition, there is reason to believe that Intel's (NASDAQ:INTC) upcoming Braswell and Cherry Trail chips will prove to be game-changers for the company.
Intel's current generation of Bay Trail processors are fabricated using a 22-nanometer process. Owing to transistor density limitations, Bay Trail chips consist of Intel's HD-integrated graphics architecture, as found in Ivy Bridge processors.
Intel's upcoming Braswell and Cherry Trail processors will, reportedly, be manufactured using a 14nm process. With this increased chip density, the chipmaker will be able to cram more transistors on the same die. Consequently, you can expect substantial CPU and GPU performance gains with less heat dissipation.
Intel announced last year that its Cherry Trail and Braswell processors would consist of the Broadwell GPU architecture. This essentially means that Cherry Trail's GPU performance will be about 40% faster than Intel's Bay Trail chips. Plus, these next-gen chips will reportedly support DDR3 memory, which is about 100% faster than DDR2, as supported by Bay Trail.
Investors should note that Intel's less powerful Braswell -- aimed at ultra-low cost mobile devices -- would sport a price tag of under $100. This will enable Intel to compete in the booming downmarket chip industry.
Leaders in this industry, Allwinner and MediaTek, have thrived due to the lack of competitive offerings from established chipmakers at such low price points. High-performance chips from the likes of Qualcomm, are sometimes more expensive than the price of downmarket tablets themselves.
Downmarket tablet manufacturers, therefore, might want to use Intel's proven technology, reliability, and established branding to gain a competitive edge over peers, which consequently, should boost sales.
War of the giants
Intel's upcoming mobile chips may also compete fiercely with established offerings. First of all, AMD has yet to announce whether its Beema and Mullins processors will support the Android platform, which commands a 79% global market share. Therefore, it would be wise to exclude AMD from the list of Intel's competitors in the tablet segment, at least for the time being.
Secondly, Intel's Cherry Trail processors house a bus bandwidth of 25.6GB/s, thanks to their DDR3 support, which competes with high-end offerings like Qualcomm's Snapdragon 805. Relatively older offerings, like the Snapdragon 800 and Intel's Bay Trail range, only reach up to 12.8GB/s and 17.5GB/s, respectively.
With smartphone sales growth slowing down, manufacturers of the commodity might want to house budget-friendly, fast-bandwidth devices to gain a competitive edge. This factor can work in Intel's favor if its Cherry Trail range is priced at a significant discount to Qualcomm's latest.
Foolish final thoughts
Under any circumstances, investors shouldn't expect Intel to dislodge Qualcomm from its pole position any time soon, as Intel's modems have generally lagged Qualcomm's in terms of performance and features. Plus, with the unveiling of its multi-mode baseband modem this year, Qualcomm may further extend its lead over Intel.
But, due to the lack of competition in the budget-friendly, high-performance chip segment, Intel appears to have a chance of succeeding. Investors, therefore, might want to keep a close-eye on Intel's Cherry Trail and Braswell price points.
Piyush Arora has no position in any stocks mentioned. 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.