Is Intel Changing Its Game Plan?
There seems to be a little wiggle room in interpreting what Intel (NASDAQ:INTC) Chief Executive Officer Paul Otellini meant in his final conference call when he commented on the company’s plans for chip manufacturing. But there is no doubt that some changes will be made after his departure.
Intel has a lot of rivals nowadays; with the mobile market booming, competitors like Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ:BRCM) have risen with it. Meanwhile, Intel has been tangled up with the stumbling PC market. And, no matter how good Intel’s reputation is, it will have to boost its mobile presence soon if it wants to stand up against Qualcomm, which has been working to strengthen its brand recognition.
The company is still being careful, it seems. When Otellini was asked about the possibility of working with chips based on the ARM (NASDAQ:ARMH) design, he said the company “would not enable a chip competitor.” The idea that Intel could make a chips like those found in Apple’s (NASDAQ:AAPL) iPhones and iPads is probably fetching for Apple and a lot of consumers, but maybe not for Intel.
Given Intel’s history, it might look shameful to be more or less producing the chip designs of another company. Though it could give Intel an in with Apple, as the iPhone maker is seeking ways to rid itself of its reliance on Samsung (SSNLF.PK), doing so could prevent the company developing its own industry-leading chip-sets for smartphones and tablets…
This may be the reasoning behind Otellini’s statement, which indicated that the company would not make chips based on another company’s designs. He said, “it would be great if we could form a strategic relationship with a customer so that it went beyond just a single foundry transaction.”
Intel is busy collecting customers to work with, and hopefully a number of those customers are big smartphone or tablet makers because Intel may have trouble maintaining relevance if it stays focused on PCs and doesn’t dive deep into the mobile market soon. Whatever the case, Otellini will soon be out the doors at Intel, and a new chief executive officer could have very different plans for how the company will function.
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