Recently, Intel (NASDAQ:INTC) has proven itself to be a leader in its field, in more aspects than one.
In order to move with the times, Intel has created a new generation of chips, and very recently it announced that these chips would be available in its new PCs. The chips, referred to as "Ivy Bridge" chips, will be able to hold more information than the previous generation. In addition, the chips will consume less power, making them far superior to any Intel-produced chips of the past. As things stand, it appears that Intel should establish itself as a leader with this innovative new design for processing chips.
What this means is that Intel's main competitors like Advanced Micro Devices (NYSE:AMD), Texas Instruments (NASDAQ:TXN), ARM Holdings (NASDAQ:ARMH), and Qualcomm (NASDAQ:QCOM) have a new bar to aim for in the chip industry. What Intel has achieved with these chips is amazing. While main competitor Advanced Micro Devices still uses 32-nm build processing Intel has managed to chop that down to 22-nm build processing. Intel has, thus, reached a significant milestone in the technology market. The new chips are also far more power-efficient than their core predecessors. The chips improve compute performance and recoding video processes significantly, as well. In summary, the chips represent a revolutionary step forward in the progression toward developing chips that are not only faster, but also lower on power consumption.
Intel also hopes to boost sales of the new Ivy Bridge chips by increasing the Thunderbolt logic integration on Ivy Bridge motherboards. Thunderbolt is a "high-speed connector technology that moves data between computers and peripherals" and the hope is that by increasing the number of Thunderbolt devices available on the market, the adoption rate of the new Ivy Bridge processors will increase noticeably.
Needless to say, this is a game changer for the market. Competitors now have to measure their success against achievements that Intel has made. As far as the processing chip industry is concerned, Intel is still on top.
This being said, some analysts feel that the Ivy Bridge chips are not living up to their expectations. Some have gone as far to describe them as an actual disappointment. There are several reasons for this, it would seem. No cores or clockspeeds were added and, in general, it seems that the chips are merely a refashioning of old technology rather than something truly unique, new and novel. The previous two generations of Intel chips provided radically huge performance boosts whereas the new Ivy Bridge chips simply do not live up to this expectation. The chips have no more than 4 cores and the new 22-nm processing is not all it's cracked up to be.
These arguments are sound. I still, however, see the Ivy Bridge chips as a fundamental and important change in the industry. For instance, Intel remains the only company in the market to have achieved even these small successes in the development and evolution of processing chips. This alone should shake doubts as to whether Intel is truly the leader in the chip industry.
Qualcomm, however, may pose a significant threat to Intel's standing in the market. For those consumers that prefer speed, the new chip from Qualcomm will be exactly what they are looking for. The chip, apparently, proves that "a phone doesn't have to be quad-core to be fast" and, although the power usage is still fairly high, it is well on par with previous generations of the chip. It's not the breakthrough that Intel was able to achieve, but it makes headway in speed progression.
Although its new chips are big news, we must not lose sight of the other developments that Intel has made in recent days. For one thing, it has launched a new product called Small Business Advantage (SBA). The program is designed to automate a number of basic office tasks in small companies that have no formal IT structure in place. It requires practically no technical knowledge to run and the amount of user intervention required in order to ensure that the system runs smoothly is near non-existent. It may be the perfect office strategy for those small businesses that don't have the capital to invest in an IT department.
In addition to this, Intel, in collaboration with Lava International, has recently released the first smartphone with Intel inside. The phone has been released in India, as Lava is an Indian based mobile phone producer.
This move to partner with Lava has raised a lot of questions in the minds of investors. It is certainly a big deal that Intel has produced its first smartphone, so the question on everyone's minds is why the company chose to collaborate with Lava, a relatively unknown company. It does not seem to be the savviest move, at least for the moment. Investors doubt may turn toward a hit in Intel's price, unless early sales figure show healthy numbers.
Intel's competitors are well behind the game. Recent reports on ARM, for example, show that the company is about to experience a decline in the royalty sales of its chip designs. This is despite there still being a high demand for devices such as smartphones that require such chips.
Texas Instruments is forecasting great sales numbers and Advanced Micro Devices is improving rapidly in terms of its revenue growth and general success, but neither company appears to be able to catch up with Intel in the technology market.
The Ivy Bridge chips may be a historical change in microchips, or they may prove to be over hyped. Either way, Intel has proven that it can continue to provide innovation in its industry and leave its competitors behind. If Ivy Bridge chips don't sell as well as Intel would like, the hope is that smartphone sales in India will help. If the company can find success in either, or perhaps in both, it should see a solid year. If not, look for the company to go back to the drawing board and draw up another great possibility.