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Intel Missed the Mobile Market

By Anders Bylund – Updated Apr 6, 2017 at 11:12AM

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The road less traveled makes all the difference.

Life doesn't have save points like a video game, nor mulligans like a friendly round of golf. Neither does business.

I think Intel (Nasdaq: INTC) CEO Paul Otellini wishes for a quick do-over right now. Speaking at the Council on Foreign Relations conference this week, Otellini ruefully discussed the topic of mobile processors: "I wish we had started earlier."

In light of rampant smartphone sales, and the possibility that handheld computers might largely replace desktops and laptops somewhere in the next decade, that makes sense. You almost feel sorry for Otellini. Intel has largely stayed on the sidelines, watching Texas Instruments (NYSE: TXN), Qualcomm (Nasdaq: QCOM), and Samsung carve up the mobile market among them with implementations of technology from ARM Holdings (Nasdaq: ARMH). Intel's Atom line is doing fine in netbooks, but it's hardly made a dent in the smartphone market.

But you know what? Don't cry for Intel, because Otellini brought this on himself. More than just missing out, Otellini was Intel's CEO when the company unloaded its XScale line of ARM chips to Marvell Technology (Nasdaq: MRVL) back in 2006. The company backed out of the mobile market quite intentionally to bear down harder on server and PC chip rival Advanced Micro Devices (NYSE: AMD), which was stealing market share from Intel left and right with its then-fresh 64-bit architecture.

That was your own choice, Paul. Don't complain now.

Intel is pouring lots of research into getting Atom fit for the mobile battle now, but it missed out on the first couple of years of the smartphone rebellion. It's never too late to join the bandwagon, I guess, but Intel can never take the first-mover advantage away from ARM and its many licensees.

Does Intel have a shot at mobile leadership, or did that ship sail already? Discuss in the comments below.

Intel is a Motley Fool Inside Value recommendation. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Intel, Marvell Technology Group, Qualcomm, and Texas Instruments, mostly by way of our 11 O'Clock Stock series. Yeah, we love us a bag of assorted chips. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

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Stocks Mentioned

QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
$117.22 (3.75%) $4.24
Intel Corporation Stock Quote
Intel Corporation
$26.97 (4.66%) $1.20
Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
$66.11 (4.34%) $2.75
ARM Holdings plc Stock Quote
ARM Holdings plc
Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
$159.84 (3.27%) $5.06
Marvell Technology Group Ltd. Stock Quote
Marvell Technology Group Ltd.
$44.50 (3.71%) $1.59

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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