In a Seeking Alpha article on April 3, contributor Alcaraz Research said Intel (NASDAQ:INTC) might ship 30 million smartphone applications processors during 2015. He said that because Intel supplies chips into the ASUS ZenFone line of smartphones, and because Asus has said it plans to ship 30 million phones during 2015, Intel could ship that many phone chips.
But there's a problem with that premise.
Intel isn't the exclusive supplier of chips for the ASUS ZenFone line
Alcaraz Research's key assumption is that Intel is the "exclusive supplier" of smartphone applications processors for ASUS smartphones. However, that is incorrect. ASUS indeed uses Intel chips for a number of its phones, but for lower-end models in the ZenFone 2 lineup, GSM Arena reported that ASUS plans to use Qualcomm (NASDAQ:QCOM) and MediaTek processors.
Life outside of ASUS
Intel launched its high-end Moorefield family of applications processors last year at Mobile World Congress, but chip adoption has been limited. The higher-end ZenFone 2 models use the Moorefield chips, as does the Lenovo P90.
That's pretty much it for this chip, and I doubt high-end ZenFones and the Lenovo P90 will get Intel to 30 million units.
However, Alcaraz Research also cited Intel's recently launched Atom x3 chips as potentially helping the company gain share in phones. While these chips seem to offer reasonable capabilities, I don't think Intel's SoFIA product line will gain the traction Intel bulls are banking on until the second-generation parts, built on the chipmaker's 14-nanometer technology, are released sometime in 2016.
If Intel planned to ship 30 million phone chips, it would have said so
At the Mobile World Congress, one industry analyst asked Intel CEO Brian Krzanich about potentially setting a large smartphone chip goal akin to the company's 40 million tablet goal.
Krzanich said he'd eventually need to tell industry observers and investors that Intel planned to hit a relatively large smartphone unit shipment goal (using 50 million and 100 million units as examples).
But he doesn't think that time is now, and suggested the company needs a sufficiently competitive product portfolio with which to do this. If Intel had plans to hit 30 million phone chips in 2015, the company's executives probably would have said something at the November investor meeting.
Quite frankly, I don't think the Atom x3 products are competitive enough to convince low-end smartphone builders to switch from Qualcomm and/or MediaTek in droves. Additionally, Intel's high-end Moorefield chip isn't the right design with which to win significant share in the midrange or high end of the phone market.
Maybe next year?
As I've said in prior articles, I'm excited to see Intel's 14-nanometer smartphone chip product family, expected to arrive next year. Intel has said it will have a low-end part called SoFIA LTE 2, a midrange part known as SoFIA MID, and a high-end part known as Broxton.
Only time will tell how these chips fare in the market, but if Intel has defined them with competitive feature-sets and actually gets them out in time, I think Alcaraz Research's forecast of 30 million smartphone chips shipped could look quite reasonable for 2016.