Inside Intel's Mobile Strategy: Opportunities and Challenges
"We're not talking years away," she said of being behind Qualcomm. "When you're going after volume, you can't be years away. Otherwise, you're just a hockey stick [a marketing analogy for hyping sharp growth] and PowerPoints. We're 12 to 18 months to getting to that volume. … This is all about volume at the end of the day." Shenoy echoed her sentiments. Intel doesn't get into markets to lose money. The plan is always to establish a strong presence and to make money, he said. That will happen with the mobility business as well. He also noted that SoFIA was an example of how quickly Intel can move when it wants to get into a market. It took two years from the first internal discussions to the time the technology hit the market, Shenoy said. Traditionally, such a process takes three to four years. Insight 64 analyst Brookwood said market dynamics will continue to make it difficult for Intel. A key problem is figuring out where Intel will find the volume it needs. Apple and Samsung hold the lion's share of the high end of the mobile market, and they are increasingly making their own ARM-based processors. The low end is populated by the likes of MediaTek and various Chinese chip makers who compete primarily on price."That just doesn't leave a lot of sockets" for Intel to go after, Brookwood said. "I think it's going to continue to be a challenge for them." At the same time, while having integrated 3G modem capabilities is good, the world is turning to LTE, which Qualcomm already has but Intel is still months away from offering. Missing out on the beginning of the mobile push in the market has put Intel in the position of trying to catch up with competitors that are not only well ahead but also continuously improving, Brookwood said. "It's very difficult to displace an incumbent, and to do that, you can't be as good," he said. "You have to be way better. Intel is hoisted on the same petard that others were hoisted on when they tried to displace Intel in PCs." In that sense, Intel finds itself in the same position in the mobile market as ARM does in its effort to gain traction against Intel in the server space, Brookwood said. However, he noted that Intel has the resources to continue pushing its efforts in smartphones until it either has success or shifts focus, and that "the market for smartphones is vast, much more vast than PCs were." He pointed to the A8 and A9 processors Apple uses in its iPhones and iPads, and suggested that given the size of the mobile market, Apple at this point has probably shipped more 64-bit processors than Intel. That said, there may be opportunities out there as more people and devices get connected. Shenoy noted that the next 4 billion people to be connected will come from outside established regions like the United States and Western Europe, making emerging markets more of a greenfield opportunity for Intel. Some users in these areas will start with a smartphone, then eventually, will buy a PC. If their first purchase is an Intel-based smartphone, it opens up greater possibilities for the company. "People in emerging markets have a variety of needs," he said, noting that right now, most of Intel's Atom x3 and SoFIA chips are finding their way into smartphones for the Chinese market. "We want to make sure we reach these people as early as possible."
Intel will get some wins—for example, Asus' ZenFone 2—but it will still be a difficult market for it, he said.