This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Intel Figure Out the Device Market?

NEW YORK ( TheStreet) -- A decade ago I did an in-depth study of Intel (INTC - Get Report).

I talked to some Chinese OEMs, and asked how the company could win their business. Don't give us computer chips, they told me. Give us complete designs. Give us brands that will buy what we make and market it.

At the time, Broadcom (BRCM - Get Report) was just starting to eat Intel's lunch at these OEMs. That situation hasn't really changed, even as feature phones have become smartphones and smartphones have become tablets.

As I wrote at Seeking Alpha, Intel has a device problem.

I know the company will insist that's not the case. They may point to the 20 Windows 8-based tablets that are now in the pipeline, or to the new Ultrabooks, as they did to TheVerge.

It's true that Windows 8 is going to keep Intel's results strong in the near term. As James Rogers noted recently here at TheStreet, Intel still earns eye-popping margins on its semiconductors. It still dominates in the data center and in the "enterprise" market.

I still own the 600 shares of Intel that I acquired in the 1990s, after selling on splits several times so my basis in them is zero dollars. But I'm not adding to my position.

Because just as Moore's Law holds that better-and-better gets faster-and-faster, with capabilities rising and prices falling steadily, year-after-year, the rate at which the market for devices changes is also increasing.

Here is one example: Amazon.com (AMZN - Get Report) announced its Kindle Fire tablet, priced at $199, last October, but that product is now obsolete. The whole market is on watch for Amazon's next announcement, which has to include a better screen, more storage, a faster processor, a better browser and an even lower price.

Phones change even faster than tablets. Many companies refresh their product lines twice a year. Phones get announced, delivered and trashed faster than primetime comedies. The turnover is faster than for reality TV stars. (Whatever happened to Snooki, or Nokia (Nokia) for that matter?)

To keep up with that pace of change, you have to get inside the product design process. You have to design your computer chip around the device, not have the device designed around the chip.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $526.03 -1.01%
ARMH $46.68 0.95%
BRCM $51.56 1.52%
INTC $28.96 2.15%
AAPL $123.38 0.50%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs