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.
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5. Samsung is producing its own products
Speaking of Samsung, that company could have been another key partner for Intel. But as noted, Samsung produces its own processors, making the need for Intel to build chips for its wildly popular devices unnecessary, except for the latest Galaxy Tab 3. The two biggest companies in the mobile space, in other words, aren’t primary Intel chip buyers. That’s not a good thing.
6. Intel is late in supporting LTE mobile technology
Intel has been producing chips for some mobile products for a couple of years, but the company has surprisingly not offered a key feature in those processors: Long Term Evolution (LTE) support. Intel has promised that its chips will support LTE later this year. But doesn’t it know that ARM-based processors have featured that technology for years?
7. Shareholders were too complacent
Shareholders are not often thought about when judging companies, but they are major change agents in the corporate world. If shareholders see trouble and start complaining, companies tend to move. But Intel’s shareholders were blinded by its profits in the PC business and didn’t notice that its shortcoming in the mobile market could prove troublesome. Now, they’re wishing they paid more attention in the beginning and got the company moving.
8. Delay after delay
Intel disappointed quite a few mobile device makers after it said on numerous occasions that it would produce chips they would want. But it seemed that every time Intel was getting close to launching those processors, it initiated a delay. Those delays only caused vendors to trust its products less. And Intel is suffering from a lack of credibility in the mobile market today.
9. It let Ultrabooks go too far
To address the impact tablets were having on its business, Intel decided to get into the Ultrabook business. Although many believe that Ultrabooks could eventually be popular alternatives to lightweight notebooks, they’ve really had no impact on tablet sales. Perhaps Intel’s hopes for Ultrabooks went too far.
10. It might already be too late
The most troubling issue for Intel might just be that it’s coming into the mobile space far too late. Sure, it’s had mobile chips before, but those were ignored. Intel believes that 2013 will be its year to make a splash. But considering so many vendors have already promised ARM-based chips and LTE support isn’t coming anytime soon, the company might find it will arrive too late to ever be a major force in the mobile market.