Intel (INTC +4.85%) is a chip powerhouse. The company spends more on research and development on a quarterly basis than many of its competitors and peers spend in a year. In the PC processor market as well as in the datacenter, its products are best-in-class and I would be hard-pressed to find much fault in the company's execution in these areas.
However, as many are well aware of, the company's execution in the mobile space hasn't been all that great. Products are often released to the market late, and when they do arrive, they're not always competitive in all of the ways that they need to be to sell and generate a profit.
It's this apparent inability to get products out on time that I believe will hamstring the company's ability to win high-profile tablets and devices, and something that the company needs to improve.
Why is timing so important?
Take a look at Apple (AAPL +0.11%), which releases new products like clockwork. In order to pull off successful product launches on a yearly cadence, its component suppliers need to be able to deliver products on time. Could you imagine what would happen if Apple couldn't get, say, the connectivity chip that it needed from Broadcom (NASDAQ: BRCM) on time for a new iPhone launch?
It wouldn't be good for Apple, and it's be terrible for Broadcom.
Not all mobile device vendors release products on such tight, iPhone-like release cadences, but when it comes to component supply, device manufacturers need to know that their suppliers can deliver on-time and in high quantities come hell or high-water.
Intel hasn't shown this at all in mobile
Intel has had issues delivering products on time in mobile. For example, take Intel's 14-nanometer mobile chips. According to Intel's public statements and road maps that have leaked online, the company was supposed to qualify the following products at the following times:
- Cherry Trail (14-nanometer tablet processor) -- Q2 2014
- Willow Trail (second-generation 14-nanometer tablet processor) -- Q2 2015
- Morganfield (14nm smartphone processor, similar in design to Willow Trail) -- Q3 2015
However, Intel did not end up qualifying Cherry Trail for sale until the very end of 2014, and based on the company's presentation at its investor meeting in 2014, Willow Trail/Morganfield (now called Broxton) will be a 2016 event.
While it may seem that the Broxton push-out was due to the 14-nanometer manufacturing hiccups that Intel experienced, I don't buy that explanation. The "mid-2015 production readiness" claim for Broxton was made at the 2013 investor meeting, well after the 14-nanometer manufacturing problems were known.
Now, I have a couple of potential explanations for why Broxton was pushed out (which you can read about here), and they may be good reasons, but having "good reasons" for delaying a chip doesn't help a customer who needed to ramp a product with said chip.
Intel needs to show better execution
In my view, Intel needs to show several generations of strong, rapid product execution in mobile. Customers in the cutthroat mobile market need to trust that Intel will deliver competitive products, in high volumes, on schedule for their mobile product launches.
I'll be watching Intel's 2016 mobile product launches -- SoFIA LTE 2 (low-end 14-nanometer mobile part), SoFIA MID (midrange 14-nanometer mobile part), and Broxton (high-end 14-nanometer mobile part) -- for improvement in the company's execution on the mobile front.
