Could the Atom Mobile Processor Push Intel Stock Past ARM and Qualcomm?

Chris Lau, Kapitall: Could a new mobile processor be a saving grace for Intel stock?

After struggling for a long while to produce a good mobile processor, Intel (INTC) seems to have finally found success with the Atom, part of the Bay Trail family.

[Read more on Tech from Kapitall: Carl Icahn Boosts Nuance Holdings, Should You Follow this Famous Investor?]

The mobile processor was selected for Dell’s Venue 8 Pro tablet. Even more impressive is that this processor is powerful enough to run Microsoft’s (MSFT) Windows 8.1. With assertions from IDC (as recently as December 2) that PC sales will decline 10.1% in 2013, will Intel and Microsoft sell enough tablets to make up the gap?

Dell Venu tablet gets rave reviews

On Amazon (AMZN), the Venue 8 pro already has 242 reviews with an average score of four out of five stars. It is powered by Intel’s Atom Z3740D, which has Intel HD graphics and runs at 1.33GHz.

screenshot

 

 

 

 

 

 

 

The Venue 8 tablet reportedly has no lag, many apps in the Microsoft store, and quality display. Users who have abandoned their PC may now run most apps on this tablet. What’s also impressive is that the tablet weighs just 0.87 pounds. That's almost as light as Apple’s (AAPL) iPad mini, which weighs at least 0.69 pounds. Apple still has an edge with battery life: the latest mini lasts 12:43, compared to 7:19 for the Venue 8 Pro.

Microsoft benefits

In addition to growing its user base for Windows 8.1, Microsoft could benefit from distributing its Office software on the tablet. Users could also start using SkyDrive to sync files across devices.

Click on the interactive chart to view data over time. Sourced from Zacks Invesment Research.

Competitors

Intel is starting to gain a foothold in the mobile market. Its primary competitors include  ARM (ARMH) and Qualcomm (QCOM). In the desktop and graphics space, Advanced Micro Devices (AMD) is a notable competitor for Intel. As Intel boosts its presence in tablets, the competition might stay in the PC space. AMD is also branching away from desktops. Its chips are being used to power both the PlayStation 4 and the Xbox One.

Intel's back in the game?

Intel has the lowest forward price to equity ratio (POP on Kapitall) among its competitors. 

It is too early to determine if Dell’s tablet will be a success, but Intel is clearly on the right track with its Atom processor. As Dell boosts advertising for its tablets, sales for the device are likely grow. The tablet market is ripe for a budget solution that provides a fully-featured Windows operating system.

 

(Written by Chris Lau, a Kapitall Writer.   Disclosure: Author has a long position in AMD.)

More from Stocks

Video: Here Is Why Carvana Isn't Worried About Amazon

Video: Here Is Why Carvana Isn't Worried About Amazon

Jim Cramer: Okta Is a Very Expensive Stock

Jim Cramer: Okta Is a Very Expensive Stock

Here's Why Tesla's Solar Shakeup Makes Sense

Here's Why Tesla's Solar Shakeup Makes Sense

Dow Rises for First Time in 9 Days, Oil Soars as OPEC Agrees to Boost Output

Dow Rises for First Time in 9 Days, Oil Soars as OPEC Agrees to Boost Output

BlackBerry CEO: Stock Price Should Be Higher, We Are Looking at M&A

BlackBerry CEO: Stock Price Should Be Higher, We Are Looking at M&A