NEW YORK ( TheStreet) -- Intel Corporation ( INTC) has been in the news recently as rumors again circulate that the company will successfully win Apple's ( AAPL) proprietary chip production business away from rival Samsung Electronics. Though the initial reaction by investors to these rumors was positive, the stock has since traded off modestly. Share prices are not simply impacted by one possible business relationship; the story is more complex. And given the current challenges facing Intel, my view is the path forward for the company -- and its share price -- gets rockier from here. All things considered, Intel's management team has done a commendable job executing in its core personal computer chip business. The "good/better/best" positioning strategy of its i-series processors has been a primary contributor to Intel's ability to expand the average selling prices of its products despite a slowing PC industry. The company has also benefited from a core market that has had very limited competition due to the trials at its one-time nemesis Advanced Micro Devices ( AMD).
The problem is that Intel's ability to continue to defy gravity is nearing its end. Four months into the launch of Microsoft's ( MSFT) latest personal computer operating system it is safe to conclude that the tepid adoption rate of Windows 8 -- which by some accounts has been even slower than it was for the much-maligned Windows Vista -- will not catalyze a meaningful upgrade cycle for personal computing hardware. As a result, as consumers continue to spend a growing share of their technology dollars on smartphones and tablets, the PC market is poised for a decline in sales this year. With Intel's core business set to experience intensifying pressure, it is up to its server business and nascent processor business for mobile devices to take the baton from here. That seems unlikely. While relative strength in the server market might continue in the near term, mobile devices present a conundrum for the venerable chipmaker. For Intel to regain some positive investor sentiment, the company needs to gain traction in the market for mobile systems on a chip. With the mobile device market currently dominated by devices made by Apple and Samsung, rival chip designs control the market. Apple's proprietary A-series chips, Qualcomm's ( QCOM) Snapdragon chips and even Samsung's own Exynos chips are based on microprocessor architecture developed by competitor ARM Holdings ( ARMH). That leaves Intel with a very steep challenge to gain market share.