Inside Intel's Mobile Strategy: Opportunities and Challenges

NEWS ANALYSIS: The world's largest chip maker continues to trail ARM in such areas as smartphones and tablets, but the IoT and emerging markets hold promise.

Intel's mobile strategy

Even before taking over as Intel CEO in 2013, Brian Krzanich had his eyes focused on the mobile space.

The world's largest chip maker, which several years ago famously misread the rapid shift in end-user device demand, concentrated on making PCs more powerful and energy-efficient, while consumers and business users were buying smartphones and tablets, most of them running on systems-on-a-chip (SoCs) from Qualcomm, Samsung and others and based on ARM's low-power architecture.

As global shipments of PCs began their multiyear decline after 2011, Intel and other top-tier tech vendors—such as Microsoft—started to make sharp pivots toward the booming mobile space in hopes of making up for lost time and grabbing some of the market that hadn't already been swept up by the likes of ARM, Google and Apple. Krzanich, then Intel's chief operating officer, told journalists in 2012 that the vendor's manufacturing facilities and supply chain were being revved up to churn out more Atom and Core chips to be used in devices like smartphones and tablets. He told Reuters that "we will start to see more and more of our capacity and our output go to things that are mobile."

As CEO—replacing Paul Otellini in May 2013—Krzanich immediately began leading an aggressive push by Intel in the mobile space and other growth areas, such as the Internet of things (IoT) and wearable devices. He reconfigured some business units and created others, accelerated the development cycle for the low-power, energy-efficient Atom platform, sacrificed profits to grow market share in the tablet space and remade the company's leadership team.

Whether all these moves will help gain ground in the competitive and highly dynamic mobile space remains to be seen. Intel executives admit the company is starting from behind, but they like where they are and where they're going. They also note that in a highly connected world, the definition of mobile continues to evolve. It's no longer simply smartphones and tablets, but also can be phablets, sensors, wearables and myriad devices and systems that make up the IoT. Company executives believe the work Intel is doing with its Atom and Core platforms and in its communications technologies—including integrated and discrete modems—will help fuel the tech giant's push into these other areas.

"There's no question that when analyzing the mobile market—and the multiple facets to the market—we need to be selective in how we pursue that market," Navin Shenoy, corporate vice president and general manager of mobility client platforms at Intel, told eWEEK.

In the areas being targeted, Intel is well on its way to establishing a solid footprint and improved profitability, Shenoy said.

However, not everyone is as optimistic.

Nathan Brookwood, principal analyst with market research firm Insight 64, said Intel is being squeezed by top-tier vendors that increasingly are making their own processors for their devices and smaller chip makers that compete primarily on price. Intel continues to trail the likes of Qualcomm in such critical areas as wireless modems, he said, adding that new areas like the IoT and wearables can offer some relief, but not a lot.

"Clearly they're struggling," Brookwood told eWEEK. "I don't know any other way to put it. They were late to the party, and their products are a little pricey. And, clearly, the only way to address that is through radical pricing."