NEW YORK ( TheStreet) -- In his first keynote address at an Intel Developer Forum, new Intel ( INTC) CEO Brian Krzanich was feisty and upbeat. Intel is going to be everywhere in the new chip markets, he said, showing prototypes of low-power "Quark" chips inside tablets and bracelets, and promising that products based on 14-nanometer architecture will be delivered next year. "The PC is in the business of redefining itself," he said. "So is Intel." But is it? One of the first things consumers will see from this "new Intel" are Chromebooks running the company's "Haswell" chips. Hewlett-Packard ( HPQ), Acer, Asus and Toshiba all showed off these products at the forum, promising prices as low as $300 for WiFi-only models with 14-inch displays. But underneath the optimism, there's disquiet. Google ( GOOG) hasn't committed to Haswell, and the new products won't be using the Haswell name because Google isn't implementing some of the chip's features. All this illustrates Intel's basic problem. The new markets have left without it, often using designs from rival ARM Holdings ( ARMH). Device makers like ARM for its low-power designs, but they also like that they can customize those designs, order just what they need, and control the intellectual property that flows from them. While Krzanich says Intel will compete at all price and power levels, that's not the question his customers are asking. Many device companies see this as a make-or-buy decision, and have chosen to make their own chips through third-party foundries rather than buy them from the fully integrated Intel. Servers, traditionally Intel's highest-profit market, are also being replaced by cloud data centers using the cheapest chips available. At its forum, Intel showed off low-power chips dubbed "Avoton" and "Rangeley" for these new markets, but the first question their salesmen will be asked is "How much?" Cloud means that they will have to compete in the server market on price, not just features. The initial stock market reaction to the Intel Developer Forum was positive, and Intel shares began trading Friday up nearly 2%. But the stock has been drifting sideways for years. It's up just 12% over the last five years, while ARM is up more than 700%. ARM shares are up recently because the Apple ( AAPL) A7 chip is based on an ARM design.
When Intel has faced competition in the past it has been able to overcome it by delivering better chips at lower prices. That's precisely what it is doing this time. But the problem today isn't the chip. It's the integrated business model under which the chip is produced. Design has become detached from manufacturing. There are only four main chip foundries left, including Intel, due to the cost of the necessary equipment, which is just as much a product of Moore's Law as faster and cheaper chips are. Device makers have become accustomed to controlling their designs and having a company like Taiwan Semiconductor ( TSM) or (in Apple's case) Samsung deliver the chips as-needed. It's the control of the business model, not the price and power consumption of the chip, that they are focused on. Intel still doesn't get that. It's still delivering chips, good chips but chips, to Original Equipment Manufacturers, or OEMs, who are expected to turn those chips into something they can sell. As the Haswell Chromebook example shows, that can require customization that makes these chips less than what Intel supplied, meaning they go out under obsolete brand names, and consumers don't see that there's anything really new here at all. Until Intel addresses the business model problem, analysts will question whether it has redefined itself at all. At the time of publication, the author held shares of AAPL and GOOG. Follow @DanaBlankenhor This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.