Intel (NASDAQ:INTC) has two lines of CPU cores that it uses in the PC processor market. It has a "big core" that is larger, performs better, and uses more power, and it has a "small core" that is smaller, performs worse, but uses less power.
At its 2014 investor meeting, Intel said it would release a big core family platform known as Skylake in the second half of 2015, with the small-core PC-oriented platform known as Braswell expected in that same time frame.
Meanwhile, some digging reveals what Intel has coming in 2016.
Intel is bringing Broxton to low-cost PCs in 2016
The Braswell processor is based on the Airmont processor core, features Intel's Gen. 8 graphics, and is built on the company's 14-nanometer manufacturing technology.
Broxton -- which Intel signaled is coming to mobile phones and tablets 2016 -- will be built on that same 14-nanometer technology, but is expected to include the next-generation Goldmont processor core and the company's Gen. 9 graphics (also found on Skylake).
According to an Intel employee's LinkedIn profile, the company is also bringing Broxton to the low-cost notebook/tablet PC market.
Broxton is likely to hit the low-cost PC market next year, probably for shipping during the back-to-school time frame. Since Broxton should bring a sizable improvement in performance over Braswell (thanks to new CPU and graphics architectures, at the very least), I'd imagine Broxton will enable meaningfully improved low-cost PCs.
Why this matters to Intel and its mobile efforts
Much of the demand for high-end mobile devices today is captured by Apple (NASDAQ:AAPL) and, to a lesser extent, Samsung (NASDAQOTH:SSNLF). If Intel were developing high-end, low-power system-on-chip solutions solely for an uncertain portion of the highly competitive high-end mobile device market, the company might not see a great return on investment (although Intel certainly has the financial might to invest all it would like).
However, the low end of the PC market is actually quite sizable -- at least on the order of tens of millions of units. The revenue and profit opportunity for using high-end mobile system-on-chip class products in the low end of the PC market is likely enough to justify Intel's development of said chips. Any additional revenue Intel can generate by selling similar chips into the tablet and smartphone markets is gravy.
Or, if you want to look at it another way, Intel has made it a strategic imperative to pursue the smartphone and tablet markets, and will develop products for those markets no matter what. It doesn't hurt, then, that these development efforts feed directly into Intel's very high revenue/margin PC chip business.
It's not all "free," though
While Intel can leverage a significant amount of the research and development costs for its mobile platforms in low-cost PC platforms, it's not 100% free. For example, Intel still needs to develop motherboards and reference designs for tablets and phones that would not be necessary if it were just targeting PCs.
Additionally, Intel needs to spend money and time developing software and drivers for Android, something it likely wouldn't do if it were aiming just at PCs with these chips. Money and time will also be required to market to mobile OEM vendors, yet another expense that is unique to mobile.
That being said, while it's not all "free" there is a lot of operating leverage to be had here. That's ultimately good for the bottom line, and thus good for shareholders.
Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. 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.
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