Intel Is Losing the Mobile War to Competing Chip Makers: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2013-05-07
 
 
 

Intel Is Losing the Mobile War to Competing Chip Makers: 10 Reasons Why


Intel is officially losing the mobile war. Don’t take anyone's word for it but the company itself. For years now, Intel CEO Paul Otellini has admitted that times are tough for Intel in the mobile market and he has been trying to get his shareholders to focus more on Intel’s success in the desktop PC market than anywhere else. And considering his company is still generating billions of dollars each quarter, they’ve been happy to do so.

But over the long term Intel can no longer afford to focus first and foremost on the PC market. This is not the mid-1990s when Intel and AMD were the only major PC chip manufacturers in the market.

These days Intel needs to worry about ARM, a company that designs the architecture for chips, along with several companies that use those designs to build their own processors, particularly for mobile devices. In other words, the mobile world is a much, much different place than the PC market. And Intel has so far failed to understand that.

That said, Intel says that it will make a splash in the mobile market this year. While it’s good to see Intel getting ready to fight harder in the mobile market, it might have already lost the war.

Read on to find out why Intel is losing the mobile war:

1. Blame it on Apple

Intel's troubles in the mobile market could have been avoided if only the company had a strong relationship with Apple. The iPhone maker could have made Intel dominant in the mobile space by bringing its processors to the handset. Instead, Apple went with an ARM-chip, and now, the rest is history.

2. It underestimated ARM

Intel made the mistake of underestimating ARM. The company thought that ARM’s business model, which focuses on designing chip architecture, couldn’t be a threat to its production-based focus. Intel was wrong. And now, ARM is soaring.

3. Power-savings is huge

One of the key reasons processors like the Qualcomm Snapdragon are successful is their ability to save battery power. From the outset, Intel didn’t quite understand how important battery-savings would be in mobile phones and the company fell short in that regard. Now, it’s focusing heavily conserving battery power. But is it too late?

4. The CEO couldn't see it coming

Intel CEO Paul Otellini just wasn't the right person to lead the company into the mobile revolution. The chief executive was a fantastic leader when PCs ruled the technology world, but as smartphones and tablets took hold, he fell short. And now Intel is paying the price.

Intel Is Losing the Mobile War to Competing Chip Makers: 10 Reasons Why


5. The business model is different

Intel's business model is one that doesn’t line up with mobile products. The company typically takes years to research and develop new chip architectures, and then develops its processors itself, causing it to charge more to vendors. In the mobile space, speed and price-savings is everything. But Intel hasn’t quite accepted that view.

6. It picked the wrong horse out of the gate

Right out of the gate, when touch-screen smartphones and tablets started taking off, Intel was still heavily focused on netbooks, thinking that that technology could hang on and eventually win the day. The company was wrong. And now it’s paying the price for being wrong.

7. Is it too focused on Ultrabooks?

After Intel made the mistake of following notebooks and netbooks, the company is now focusing much of its effort on Ultrabooks. Intel reasons that ultrabooks will be the ideal replacement for tablets and lightweight notebooks, and should be something incorporated into any product plan. But whether Ultrabooks will actually take off remains to be seen.

8. The margins are tight

One of Intel's biggest struggles in the mobile space is that it's profit margins are a little too tight for its business model. Chip-production companies in the mobile market need to be lean and agile in order to save cash on processors. And historically, Intel has not been as strong in that regard as it could have been.

9. Big companies move slowly

In addition to being lean and agile, Intel needs to act more quickly in the mobile space. Device makers are launching new products every year, and companies like ARM, Qualcomm, and others, are able to meet their demand for something new and exciting. Intel, meanwhile, has been slow to roll out a roadmap and is just now trying to make a move for the mobile chip market. It’s a huge issue.

10. Samsung is a huge concern

Samsung might just be one of Intel's biggest concerns in the mobile space. Samsung is selling more smartphones than any other vendor and is even topping the feature phone market. What’s worse for Intel is that Samsung has its own chip-production apparatus in place, making relying on Intel unnecessary. That leaves a massive customer out of Intel’s mix.

Follow Don Reisinger on Twitter by clicking here

Rocket Fuel