Friday, January 14, 2011

Intel CEO's Fate Hinges On Mobile

Intel CEO Paul Otellini survived an onslaught from AMD in the early 2000s when its smaller rivals' true dual core chips schooled the versions that Intel came out with.

But now, Intel is faced with another threat. This time, there is not one specific target like AMD but a loose consortium of companies in the hot growing mobile market.

And with the firing of AMD's CEO last week, should Otellini see it as a warning for what could happen to him if he doesn't deliver in the next year of so? So far, Intel has been able to rely on its core CPU business for the desktop and laptops. And between 2009 through early 2010, the Atom chip gave Intel an added boost and allowed it to virtually own the netbook market.

Then came the iPad and sales of netbooks tanked big time. Just ask Acer. They won't admit it but their sales drop in the fourth quarter of 2010 is obvious.

To make matters worse for Otellini and Intel, they have no presence in the smart phone market and very little if any of it's chips are used in tablets. And I am confident in saying that zero Intel chips are used in tablets with any meaningful battery life.

And things haven't gotten better so far in 2011. As CES got underway last week, Microsoft, the second party of the duopoly better known as Wintel, will be porting its next Windows to the ARM chips, the current dominant chip designer in the mobile market.

And that's not all. While everyone coming out of CES is talking about Android tablets, the bigger story is the CPU that will power the high-end Honeycomb (Android 3 - Google supposedly designed it from the ground up specifically for tablets) tablets.

Nvidia will make available to everyone Tegra 2, a highly efficient and powerful CPU, that is capable of giving users great 3D experience, high resolution, faster operations, and, most important of all for tablets, long battery life.

Meanwhile, there are tablets coming that will be released using Intel's Atom chips that will run Windows 7. Unfortunately, these tablets will only sport half the battery life of high-end tablets like the iPad (11-12 hours).

However, you don't want to count Intel out just yet. When comes to being backed against the wall, this is one company that I don't want to mess with if I'm ARM, Qualcomm, TI, or Nvidia. It has the deep pockets, R and D, and marketing prowess to make a come-from-behind win.

It'll be a long hard battle but I think Intel is fully capable quickly matching anything on the market in 12 to 18 months. The question is whether it'll be too late for Otellini.

-- Post From My iPad

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