Intel Corporation Plans Mobile Investment To Revive Profits


Intel Corporation (NASDAQ:INTC) is apprehensive about its future in the electronics industry, where the internet connects everything and everyone. The mobile-chip division continues to lose money, and some major investments must be made by the company to revive growth. Stacy Smith, the Chief Financial Officer of the company said that though the start has been slow, but it is expected that a point will be reached this year when company’s mobile-chip capabilities will start to win over new customers.

“In five years, every device will need to connect,” Smith said in an interview to Bloomberg yesterday at the company’s Santa Clara, California, headquarters. “We have to make these investments to participate in these huge opportunities.”

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Intel still hopeful

The mobile and communications group of Intel Corporation (NASDAQ:INTC) reported a loss of $929 million in the first quarter owing to a 61% decline in sales. These results led to the conclusions by certain major investors that Intel might be better off if it shuts down the loss-making unit and diverts the resources towards producing chips for other players.

The company did not introduce the power efficient chips capable of running tablet computers early enough and missed reaping the benefits in the sector, but it’s not too late to become a player in the mobile sector. By the end of 2014, it is expected that 15-20% units of the tablet market will be shipped by Intel as informed by Smith.

Qualcomm leads the pack

The majority of personal computers run on Intel Corporation (NASDAQ:INTC)’s chips and this sector generates the most revenue for the company. Despite being the market leader in computer chips, unfortunately the personal computers market is on a decline because there is a shift in consumer demand towards mobile gadgets such as smartphones and tablets. To cope with this unfavorable situation, the company is trying hard to win processor orders from mobile device manufacturers.

Qualcomm Inc. is the leader in the manufacturing of chips that have the capability of connecting high-speed cellular networks, and Intel Corporation (NASDAQ:INTC) will have to offer competitive products to compete in the space. Over the last few years, Qualcomm has been able to gain a huge market share along with driving out most competitors.