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Brian Krzanich took over as chief executive of Intel (INTC), replacing Paul Otellini at a recent shareholders meeting.

Krzanich has been an Intel employee for 31 years with little exposure to the mobile space. After 40 years of continuous service, Former chief executive Otellini announced in last November that he will step down in May to enjoy his retirement. Intel is facing a decline in the PC processors market due to which it is focusing on the 'mobiles and tablet' market to offset this decline. It has taken a new direction to make energy efficient products to gain success in the mobile and tablet market.

Targeting the mobile market

Intel is the world's largest semiconductor company but is facing a decline in its PC processor business. It is now targeting the smartphones market, which is showing exponential growth. The emerging trend of tablets and smartphones has negatively affected PC growth rates. The company believes that the profits generated from the mobile market will cover its PC decline. Therefore, Intel is now spending more effort in targeting the mobile market and has increased its focus on developing new chips for smartphones.

Intel's leadership has already accepted that the company was late to the mobile market. The new CEO Krzanich said at an annual meeting:

"Yes, we missed it, we were slow to tablets and some of the mobile computing. We do believe we have a good base."

Intel's new catalysts

The company is now focusing on more innovative energy-efficient products, which are integral for success in the mobile-devices market. Intel's new Haswell chips were ready to be launched in the second quarter of 2013. Haswell chips will perform better in terms of graphic performance and power consumption. The company is also focusing on the lower-priced notebook space and has indicated that the company will make processors for the $200 notebook segment. Intel's latest innovation of 'Baytrail' processors will provide a gain over the ARM competitors. These products will capture a large market share from ARM processors.

Tablet market share

Intel is rapidly expanding in the tablet market; analysts estimate that the company's windows tablet has more than 90% of the total Windows market share. Windows tablets account for 7.5% of the entire tablet market in the first quarter. Android and iOS are the main competitors in the tablet market. Apple holds a 48.2% market share while 43.4% share belongs to Android tablets.

Intel is challenging both companies in the graphics market. Its latest innovation code in Haswell is a serious threat to both Advanced Micro Devices, Inc. (AMD) and NVIDIA Corporation (NVDA). Yet, Haswell may not impact the profitability of Nvidia because gamers need discrete graphic cards. I believe Haswell is no tough competition for Nvidia in the gaming graphics market as it is no match for Nividia's superior graphic card. Additionally, the company is also beating ARM competitors like Qualcomm in the windows 8 market.

Chinese PC giant Lenovo is one of the largest smartphone customers of Intel. Recently Lenovo launched its K900 Android smartphone. The k900 includes Intel's dual core Clover Trail + platform. Lenovo primarily made only laptops and desktops but has now changed its goal to make great computing devices. Besides K900, it also launched five other Android smartphones, namely A706, A390, P780, S820 and S920.

In the first quarter of 2013, AMD reported a 3% increase in its revenue from the graphics segment sequentially. AMD is now focused on cost control systems in order to improve its bottom line. Although the future profitability of AMD depends largely on the sale of Sony PlayStation 4 and Microsoft Xbox 720 console systems.

Conclusion

Intel's stock is currently under-performing because the PC market is in decline. Its innovation of the Baytrail processor will increase its presence in the tablet market and company's revenue for 2013/14 will show growth if it gains in the tablet. Haswell processors are the next 'big' thing for Intel and their increasing demand for tablets can offset declining profits and revenues from the PCs. There are some exciting catalysts approaching for Intel, which makes it a good investment at current valuations.

Source: Buy Intel On Valuation

Additional disclosure: Equity Whisper is a team of analysts. This article was written by our Technology analyst. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.