Intel Corporation (NASDAQ:INTC) might have been shadowed this year at CES (the Consumer Electronic Show) by Qualcomm, Inc. (NASDAQ:QCOM)’s bizarre keynote address and the presence of Desmond Tutu, Big Bird and Microsoft Corporation (NASDAQ:MSFT)’s very own Steve Ballmer, but going ahead, the crucial problem for the chip maker will be to stop the growing presence of Qualcomm’s mobile processors.
Intel Corporation (NASDAQ:INTC) revealed it plans last year to foray into the smartphone market with a new version of its Atom processor. One year on, Intel did manage to score small wins with its Orange Santa Clara and the Motorola RAZRi. At this year’s CES press conference in Las Vegas, Intel revealed plans for new chips, including two low-power chips aimed specifically at smartphones: namely, the Atom Z2420 (formerly codenamed ‘Lexington’) and the Z2580 (formerly known as ‘Clover Trail +’).
The 2420 is designed to target the huge opportunity in developing markets. Its specification include; up to 1.2GHz clock speed, 1080p hardware accelerated encoding and decoding, support for multiple cameras and “advanced imaging capabilities” found in higher-end devices. The other one, Z2580, is focused on mainstream or high-end phones. Intel Corporation (NASDAQ:INTC) claims that Z2580 is twice as powerful as its current generation Z2460.
The chip maker sensing increased opportunity is focusing more on the low-end and emerging markets. The same analysis has been backed by the Linley Group of analysts, according to whom, in 2013, China and other price-conscious countries will register rapid growth in mobile.
“After years of racing to deliver more performance, smartphone makers shifted their attention to the low end. In China, the world’s largest smartphone market, half of all smartphones sell for less than 1,000 Yuan ($160), and some prices have fallen below 700 Yuan,” the Linley Group said.
Increased focus on low-end is a wise strategy from Intel, especially at a time when rivals are now shipping quad-core handsets, with more on the way.
Alex Gauna, an analyst at JMP Securities said Intel’s announcements “fell short of introducing any new breakthrough design wins or use cases” and that its achievements were iterative, rather than “the game changers its marketing is claiming”.
With uncertain market scenario, Intel Corporation (NASDAQ:INTC) is moving wisely to pocket easy wins, mainly in developing markets, which are still relatively unknown for big brands that own the high-end. With increasing pressures from handset makers, Intel will soon have to have to come up with a plan to attract the players to switch to their designs, or it could move forward with a focus on emerging markets and hope to replicate the success in more mature regions.
