Intel is building close ties with manufacturers to get its chips into more tablets, putting pressure on fabless ARM chip makers.
Brent Young, director of China Technology Ecosystem and China Product Marketing at Intel China. (Source: Intel)
Intel’s missed opportunity in mobile is a familiar story to many these days, but the company knows where its future lies and has been more aggressive than ever in capturing the mobile market, especially in tablets. Intel has readjusted its strategy to focus on partnerships with manufacturers, most notably with white box manufacturers in Shenzhen, China. In an interview with Global Sources, Intel marketing director Brent Young emphasized his company's commitment to mobile and confidence in its future success.
"The degree of conviction inside the company towards ensuring that we win in mobile is very high," Young said. "It's a perfect kind of conviction because it's a very well thought out and well planned and a very humble kind of conviction.”
Young is helping spearhead Intel's China Technology Ecosystem CTE initiative, which is a push to get Intel chips into the China market. The company says it has more than 300 manufacturing partners in China, including several tablet manufacturers that, according to Intel, have already launched more than 70 tablets with Intel Core processors.
Intel set a goal of shipping 40 million tablets equipped with its processors this year, a fourfold increase over 2013. At the Intel Developer Forum in San Francisco last September, company CEO Brian Krzanich said Intel was on track to meet that goal.
Mobile products are an important market for almost everyone involved in computer electronics these days, but after missing early opportunities in the smartphone and tablet markets, the company appears more determined than ever to prove itself in the space, to the point that the company has been subsidizing the cost of chips for manufacturers.
The turning point in the mobile revolution was the introduction of Apple's original iPhone in 2007. Once phones effectively became full computers, used for a slew of productivity and entertainment options, they needed powerful processors that would also make the best use of limited battery capacity. The solution for the last several years has been ARM-based chips. Intel is finally catching up in power efficiency and its chips are still the top performers in the market, but the company has found it still needs to find a compelling reason to get manufacturers to support Intel architecture.
The fabless market for ARM chips is abounding with competition, so one way companies have differentiated themselves is through value added services that help manufacturer’s adopt chip makers’ technology and create a smooth experience in the end products. Intel realized that to better compete in mobile, it would have to build closer relationships with manufacturers, which it is now experimenting with in China.
"A lot of our competition in that space has what’s called a turnkey solution,” Young said. “So you don’t just sell them the piece of silicon and walk away."
Intel now provides manufacturers with a “holistic bag of parts,” according to Young, which includes tools for optimizing drivers, porting apps, helping factories with quality control and more. Competition among fabless semiconductor companies has changed the industry, and Intel appears ready to acknowledge the new reality.
All the competition among ARM manufacturers is actually one reason Intel is confident about being able to build more partnerships and increase its footprint in mobile. Many consumer product manufacturers already source from multiple chip makers and deal with multiple support infrastructures, Young said.
"It’s not too difficult to introduce x86 into that, as well," he said.
Young admitted that there is some difference in software development and the skills that go along with that, but he said he does not see adoption of a new ecosystem to be a big inhibitor because Intel offers substantial support, including training in Shanghai and Shenzhen.
Intel also stresses that their chips are compatible with multiple platforms, meaning their processors can run full Windows. At IDF, the company emphasized that its chips can run Apple's OS X, Microsoft Windows, and Google's Android and Chrome OS and said that its chips have equal or better performance than ARM chips in running the top 2,000 applications.
Intel also made a big show of tablet/laptop hybrid devices, or two-in-one devices. Given the company makes chips with the processing power to run full Windows, it makes sense for Intel to see a bright future for this convergence. While this seems to be a plausible future and many already use tablets for myriad complex tasks, Windows tablets have yet to become big sellers.
Intel CEO Brian Krzanich and Dell CEO Michael Dell at September's Intel Developer Forum in San Francisco introduce the Dell Venue 8 7000, which they called the world's thinnest tablet at 6mm thick and runs on an Intel Atom Z3480.
Intel does not have to rely on Microsoft, though. It's working to convince tablet makers that the power of its chips can benefit devices running any OS and can be used in very slim form factors. The Core M processor will be part of Intel's next generation of technology, and the company is already telling developers to expect a much smaller, more power efficient and more capable chip than ever before.
Still, Intel does not want to leave anything to chance. The company is finally borrowing from the ARM playbook and has partneredwith Fuzhou, China-based Rockchip to design SoC processors based on Intel Atom chips. With Rockchip's distribution channels across Asia, this gives Intel another way to plant itself firmly in the tablet market.
"What we're trying to explore is to see what the best way of entering the market is," Young said. "It's a totally new model for Intel, right? But it's very exciting and I really hope it works."
The rest of Intel clearly hopes it works, as well. Given how much money and energy company has poured into mobile, it appears that failure is not an option.