Although Intel may be showing up fashionably late to the smartphone and tablet party, the party has only just begun. To date, the world has reached about 25% smartphone penetration and the tablet market is expected to grow to about half the size of the PC market this year.
Despite this relatively low saturation, these two industries have experienced explosive growth, which has put pressure on the PC industry, an area where Intel remains heavily entrenched. Last year marked the first time in over 12 years that the PC industry witnessed a decline in overall shipments. In order for Intel to defend itself against the mobile computing assault, it must develop compelling products that find their way into millions upon millions of mobile devices. Intel has only begun its big push into the mobile computing world, and it should continue benefiting from the fact it owns the world's most technologically advanced semiconductor foundries. If all goes to plan, Intel's bleeding-edge manufacturing processes will ultimately carry the weight, helping secure its future in our increasingly mobile world.
The beauty of mobile computing compared to PC computing is that there's less rigidity in terms of what chip architecture can be used. Although ARM Holdings' architecture is currently dominating Intel in mobile computing applications, Google Android still gives Intel the opportunity to implement its PC-based x86 architecture. Ultimately, this processor-agnostic approach allows the market to decide which chip architecture is best suited for the task at hand.
2014 and beyond
The ARM versus Intel battle will really come to a head next year because it'll be when Intel will begin delivering 14-nanometer chip designs. At that time, Intel is expected to have a two- to three-year lead over Taiwan Semiconductor because TSMC will only be at 20-nanometers and a generation behind on its FinFET technology, which integrates the use of 3-D transistors. In other words, the next two to three years give Intel a unique opportunity to show how its chips can theoretically be more power efficient thanks to better foundry processes.
Since Intel's chips were originally designed for power and not efficiency, Intel's success in mobile computing largely comes down to how efficient it can make its chips. If Intel can make a more powerful and more efficient chip than what ARM's licensees can produce, it will surely threaten ARM's current stronghold in the mobile computing market. As the next few years unfold, let's not jump the gun and count Chipzilla out of the running yet.
When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.
The article Will Intel Become a Mobile-Computing King? originally appeared on Fool.com.Fool contributor Steve Heller owns shares of Google and Intel. The Motley Fool recommends Google and Intel. The Motley Fool owns shares of Google and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.