NEWS ANALYSIS: Intel is having an extremely tough time competing in the mobile space. The reasons why are numerous and intractable.
For decades Intel has been the main player in the computer processor market. The company's chips are widely viewed as the best in the PC market.
Despite a period in the late-1990s when enthusiasts were hot on AMD chips, Intel has remained atop the marketplace. All through that time Intel was viewed as unbeatable, and the company's revenue and profits reflected that.
But in 2007 when the iPhone launched, everything changed. The average consumer was more interested in getting a high-end smartphone than buying that latest Windows PC design.
In the process, Intel—a company that should have had the brains and vision to anticipate this market sea change and capitalize on it—was left behind. It became even worse in the tablet market when mobile device makers turned to energy-stingy ARM-processes chips from companies like Qualcomm and others and didn't give a thought to working with Intel on their new products.
Intel itself has acknowledged its issues
, but the company has promised that things will change. The trouble is that so far not much has changed. The company is mired in trouble that if not solved soon could topple the company from its long-dominant position in the processor market.
Read on to find out why Intel is in deep trouble in mobile:
1. There was always a battery problem
The big issue with Intel's mobile chips
is that they were battery hogs. For years now, the company has theoretically offered the option for vendors to bundle its chips in their products, but the smart companies—just about all of them—declined to use them. They realized that Intel chips were hard on batteries, and in the mobile market generous battery life is a decisive feature with buyers.
2. Intel executives didn't see it coming
Intel was caught entirely off-guard by the impact the mobile market would have on its business. The company had no idea that smartphones would be so popular or that tablets would hurt PC shipments to the degree that they have. Intel was caught sleeping. And now, it's paying the price.
3. Too many companies wanted in
In the PC market, Intel really has only one competitor that it ever had to worry much about—AMD. In the mobile space, however, ARM Holdings, the designers of the ARM processor, created a whole class of new Intel competitors by licensing its chip architecture to other chip makers. That has created fierce competition in the market. So far Intel hasn't found a way to respond effectively to this challenge.
4. Apple, Apple, Apple
Apple could very well be the biggest issue right now for Intel
. If Intel had worked with Apple on its iPhone and iPad, the company would be in the prime position to lead the smartphone and tablet markets. But Apple is currently using ARM-based chips built by Samsung. According to some reports, it'll go to Taiwan Semiconductor next. That's bad news for Intel.