Intel Decides to Play a No-Win Game with $100 Tablets

Intel has been trying for many years to get into the mobile market, and they've promised us year after year that this is the year they'll finally break into the market. But so far it hasn't happened, and I don't really see it happening anytime soon, either.

I've always thought Intel had only 2 strategies to play here, as it gets disrupted by ARM chips, from the low-end to the high-end: either ignore ARM chips, and focus only on the "high-end" PC chips, where Intel will probably always dominate, or focus almost fully on the Atom line of chips, to fight against the ARM chip makers. Unfortunately, neither of them means success for Intel.

The problem with the first one is more obvious than the problem with the second one. If Intel ignores ARM, and they focus only on PC chips, ARM chips will keep getting better and better, until most people won't need anything more than the performance of an ARM chip. ARM chips are already powerful enough for web-browsing, full HD video playback, and so on. Imagine a few years down the road, where high-end ARM chips will already be more than enough for most people. Intel's chips would be irrelevant for most people, even if Intel's Core line of chips will continue to improve in performance and stay ahead of the ARM chips.

Intel has announced recently at their IDF event that they will be very focused on helping manufacturers make $100 tablets with their own low-end Atom chips. This may seem like a good idea for Intel and others, too. If they manage to gain some market share, even at the very low-end, that has to be good for them, right?

Not so fast. Lest we forget, Intel is a company that makes most of its money from high margin chips like the Core line of chips (Haswell, and so on). If Intel could only sell Atom chips from tomorrow, that cost from $20 to $60, they'd have a really hard time surviving as a company (or not without drastic cuts in salaries, layoffs and without selling divisions). That could happen if Intel is forced (by ARM) to sell increasingly more Atom chips instead of Core chips, therefore cannibalizing their high-price/high-margin chips, with low-price/low-margin ones.

That's why this is a no-win game Intel is playing again ARM, because they would actually be playing by ARM's rules (low-price/low-margin chips). Even if Intel "wins" a significant portion of the mobile market (so far they're still struggling with that, too), it would still mean their chips have basically been commoditized, and Intel would only be one of the dozen or so ARM chip makers (some less known than others).

It will be interesting to see if Intel's $100 tablet go anywhere, but my guess is that even if they don't suffer from performance issues, like the Atom Lexington-based devices did, they would still have too low storage, RAM, and very poor quality and low-resolution displays, making them not very compelling products.

Copyright ©2019 Android Headlines. All Rights Reserved
This post may contain affiliate links. See our privacy policy for more information.
You May Like These
More Like This:
About the Author

Lucian Armasu

Senior Writer
Lucian is passionate about writing about different technologies, talking about their potential, and predicting tech trends. Visit his <a href="">technology news</a> website at <a href=""></a>.