Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

How Intel knocked itself out of the smartphone chip market

Agam Shah | May 5, 2016
It failed in smartphones because of ill-advised decisions and bad timing.

Intel's decision to pass on making chips for Apple's iPhone back in 2007 now looks like a huge mistake.

Former CEO Paul Otellini admitted as much in a 2013 interview with The Atlantic. Intel has now bailed out of the smartphone chip market while Apple is flying high with its iPhones, based on its own A-series chips.

Intel has cancelled its upcoming Atom chip lines for smartphones, including Broxton and the Sofia 3GX, Sofia LTE and Sofia LTE2 commercial platforms. That decision ends close to a decade of futility with Intel trying to outmaneuver rivals like Qualcomm, Apple, and Samsung, which make mobile chips based technology licensed from ARM.

Intel still has a mobile strategy, but it's a major change in direction. The chipmaker is looking ahead to speedy 5G technology, which won't be limited to mobile devices. The technology will also be used in sensor devices, industrial equipment, cars, drones, and robots.

The long-term view of 5G will help Intel play a role in the fast-growing Internet of Things market, with Gartner estimating 20.8 billion connected devices to be in use by 2020. Intel is making baseband radio processors, communications equipment, back-end appliances, and field-programmable gate arrays (FPGAs) that will drive 5G deployments.

Intel will continue to ship existing Sofia and Atom tablet chips, code-named Cherry Trail, to device makers. Cherry Trail chips will be followed by Pentium and Celeron chips code-named Apollo Lake, which are targeted toward hybrids and laptops.

The Atom smartphone chip cancellations pull the curtain back on an ugly past in which Intel shot itself in the foot with bad timing and ill-advised executive decisions, analysts said.

In early to mid-2000s, under then-CEO Craig Barrett, Intel started laying down an end-to-end mobile and networking strategy, which included making networking equipment and mobile phone chips.

In a 2005 interview with IDG News Service, Barrett insisted Intel's mobile chips were popular with mobile phone makers. Intel's ARM-based StrongARM processors were a big part of its strategy, and the biggest competition at the time came from Texas Instruments' OMAP processors.

But Otellini, who replaced Barrett, deemphasized the mobile and networking strategy to focus on Intel's core PC market. Intel's PC offerings then came under pressure when AMD became a serious competitor with innovative chips, said Dean McCarron, principal analyst at Mercury Research.

As new CEO in 2006, Otellini made one of his biggest announcements when Apple switched Macs to Intel's x86 chips. Intel in late 2006 sold the StrongARM assets to Marvell for US $600 million.

Two major factors later changed Intel's view on smartphones -- the success of the iPhone, and how it cut into PC sales. Tablets then began to hurt PCs sales after the iPad was released in 2010, and those devices did not use x86 chips.


1  2  3  Next Page 

Sign up for Computerworld eNewsletters.