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In my earlier statements on this article, I argued that Intel's (NASDAQ:INTC) future viability is excellent. I highlighted the company's move to expand its chip business to ride on the forthcoming boom for Internet of Everything products. Unfortunately, some non-believers are still belittling the capacity of Intel's new Quark chip, derisively calling it a mere "science project."

I even had the gumption to say that should Intel be successful in putting many of its processors inside smart devices, it won't have the need for the smartphone business. I am holding fast to this projection, it's plain to see that embedded chip business for smart devices will outgrow the smartphone sector.

First, I am very confident that Intel's play for Internet of Everything is not just vaporware. They own Wind River, a world leader in embedded systems. The technology and the facility to produce the said chips are on hand. Intel's huge cash reserves of $19.2 billion can fund any new venture without taking on debt. They can easily afford to spend more money on R&D to come up with a better Internet of Everything processor.

Quark is not a Science Project

Intel is serious about Quark. Doubts about Intel's smartphone chip strategy are justifiable based on its previous poor performance. However, I think the Internet of Things venture is more feasible. The Wind River people are well qualified to implement Intel's drive towards powering up internet-enabled appliances and other non-phone devices.

Quark is now commercial - the open-source $69 Intel Galileo is scheduled to hit the stores around December 16. The Quark-powered Galileo is Intel's guinea pig Internet of Things experiment. It's a computer product that's comparable to the very successful mini-computer, Raspberry Pi.

Quark uses less power than an ARM processor, making it perfect for embedding on almost anything that can be web-enabled. The release of the compact Galileo computer is Intel's move to tap the geek hobbyist market to help them test the feasibility of Quark. Galileo supports the Arduino development platform which is the industry standard for coding small applications for smart electronic products.

The early adaptors of Galileo are most probably tech-heads or highly-skilled hackers who will test Quark's fitness for Internet of Things software development. The results from these experimentations by Galileo buyers will help Intel figure out its Internet of Everything strategy.

If Quark fails to impress the geek community, Intel can learn from its failings and produce a better version of it. If the 400 MHZ cap limit of Quark right now should prove to be too slow for more complex products, Intel can tweak it to produce more computing muscle.

PC Sales are Stabilizing

Intel's main revenue maker, the traditional PC market, will most likely stabilize starting next year. Corporate buyers, who account for 49% of total PC sales, are projected to buy more replacement computers for their need. Companies will have to upgrade millions of their Windows XP units to newer models. Microsoft will end its support for Windows XP by April 2014.

INTC's price gained more than 2% from this recent development in PC sales. Intel always benefits from a new cycle surge of corporate buying. Despite the rise of powerful quadcore-equipped iOS, Chrome OS, and Android machines, most companies still prefer to have Wintel machines as office workhorses.

Microsoft (NASDAQ:MSFT) is Willing To Lose Money To Gain Market Share
Intel's best friend, Microsoft, is also keen on establishing a stronger presence in the smartphone and tablet computer market. Microsoft's latest move to offer $199 Windows 8 tablet products during this holiday season is not a desperate tactic. It's a calculated steal-the-customer with cheaper price tags and gain back the losses later strategy.

Intel's current Bay Trail tablet chip business is tied with the success of Windows 8.1 products. Intel and Microsoft's play for market share is brilliant. INTC stocks perform well when Microsoft sells lots of its products. The software giant is starting to gain market share for its smartphone products. Too bad, not one of those Windows 8 phones is equipped with Intel's processor. INTC shares would have been higher than $25 if only Intel didn't screw up its mobile phone processor.

Software-Defined Networking
Intel's new generation Atom processors are winning acceptance in the Software Defined Networking (SDN) industry. This is a new momentum growth industry where Intel can gain more revenue. It has a viable plan to gain a decent market share in the SDN.

Intel's SDN plans may have went under the radar this year, but third-party vendors like ADI Engineering are already coming up with SDN products that contain Intel's Atom C2000 processor. Facebook (NASDAQ:FB) actually announced their decision to use low-power Atom processors for its planned SDN roll-out next year. Given the size of Facebook data centers, this is a big win for Intel.

Other corporations who want to save money may also follow the steps of Facebook. Intel's Atom C2000 is a good alternative to ARM-based SDN solutions.

Intel is not overpriced. INTC is just trading at the correct levels right now. With a trailing and Forward P/E at around 13, this stock is for a long-term play. The price may even dip next year, but come 2014, INTC may make a sudden movement towards the $30 price levels. This is possible if Intel actually produce worthwhile sales of its Internet of Things, tablet computer, and SDN processors.

Source: Intel: Recent Positive Developments Makes It A Buy