Is Intel Ready to Make Its Mark with Smartphones?
Roger Kay, principal analyst with Endpoint Technologies Associates, said it makes sense that Intel will make a significant push into the tablet space with the 22-nm Ivy Bridge chips, but he wouldn't expect the company to make its mark in smartphones until it starts coming out with its 14-nm chips-featuring the Tri-Gate technology-about two years later. It won't be until that time that Intel processors will be able to challenge ARM in low-power capabilities, Kay said. "Not at 32, maybe at 22, for sure at 14," he said in an interview with eWEEK. "Maybe 22 is not all the way there for handsets yet, while it's plenty for the tablet business.""There is still a lot of inertia holding ARM in place," Kay said. That inertia will be difficult for Intel to displace, even with the kind of resources it has. "Intel is coming at this market from behind, but the investment is almost unparalleled in the history of the company and yet it still might not be enough," Enderle said in an email. "The difficulty is they have to not only be better, they have to be enough better to displace a very different technology. Generally, Intel has benefited from this dynamic as the entrenched vendor in the PC space; now this market dynamic works against them. Making a massive improvement like this [new transistor structure] will be critical to this battle, but it will still require them to walk away with major wins, and is this enough to move, even with major Intel co-funding, a major vendor to their product set?" Over the past week, there has been speculation that Intel is looking to serve as Apple's foundry for ARM-based chips for such popular mobile devices as iPhones, iPads and iPods. The rumors were fueled by a research note from Piper Jaffray analyst Gus Richard, who said that "based on a number of inputs, we believe Intel is also vying for Apple's foundry business. It makes strategic sense for both companies. The combination of Apple's growing demand and market share in smart phones and tablets gives Intel a position in these markets and drives the logic volume Intel needs to stay ahead in manufacturing." Such a deal would be critical for Intel, Enderle said. "Rumor is that Apple is looking at such a move, and if they get Apple, the earth moves," he wrote. "But if they don't get a major brand and/or a very popular product, [the Tri-Gate technology] still won't be enough." Intel is not sitting still waiting for the Ivy Bridge chips. The company last month officially announced its Atom Z670 "Oak Trail" processor designed for tablets, with officials saying they expect at least 35 designs powered by the chip to start hitting the market this month. They also have said they expect Intel-powered smartphones to be released beginning later this year. Along with helping drive Intel's mobile ambitions, the Ivy Bridge chips will help counter efforts by ARM and its partners, including Marvell and Nvidia, which are looking to push ARM-based processors into the data center.
Both Kay and Rob Enderle, principal analyst with The Enderle Group, said Intel also is facing a market situation from an unfamiliar vantage point. Intel for years has been the dominant player in the PC and server chip space, giving it an advantage similar to that of a political incumbent. Now, however, it's the upstart company trying to displace the top vendor-ARM-in the mobile device space.