A few standout tech names have the requisite catalysts to head higher before 2012 is finished. Intel, Google, Baidu, AMD and Arm Holdings are set to redraw the architecture of the tablet and smartphone market, with potentially substantial margin expansion likely to follow suit.
Or so the rumors say. However, it seems to me that Windows will struggle to meet its target and successfully create a new OS that needs to run four to five architectures within the set time frame. It just simply does not seem possible. Manufacturers will be releasing a variety of form factors for Windows 8 devices. About half of the new tablets will combine aspects of a traditional physical keyboard-based laptop and tablet, so this really is a new path for the company to pursue. This may make things substantially easier for those who struggle with new technology. In my mind, this will ease the transition for computer users from a keyboard based system to a touch screen.
It can go without saying that the new tablets will be serious competition for similar products already on the market.
All of the devices will contain Clover Trail, which is Intel's first dual-core Atom design based on its 32-nanometer process technology. We can also expect Intel's higher-performance Ivy Bridge processor to be incorporated into new tablet designs down the line. Innovation does not stop there. "Bay Trail" will be the company's future 22-nanometer follow-up to Clover Trail in the near future. It will be similar to Clover Trail in terms of battery life but will also incorporate a lot of security features and Infineon (3G/4G) silicon inside. However at this point, it is unclear when the chip will arrive. In addition, the company plans to release a low-power Atom chip code-named Merrifield for high-performance smartphones next year.
Intel recently announced its future plans for chips that will be used in smartphones. Essentially, it will harness the new 22nm processors for a two-year plan targeting super phones as well as low end models, and then move on to 14nm. Presumably Intel has realized, like many of its competitors, that the biggest smartphone market of buyers cannot afford the most expensive phones. Consequently, it has begun channeling some of its efforts into creating affordable and low-end smartphones for the general populace. The company has pledged to "harness its latest manufacturing processes for the low power requirements of mobile devices". A number of mobile phone companies have begun using Intel chips, but the company needs to go a lot further in boosting the performance/power efficiency ratio to eat into the 95% share of ARM-based processors in the mobile world.
One of the aims of this new focus on smartphone chips is to entice Apple (AAPL) to let it get in on the iPhone sales action. This may be quite an optimistic move for the chip company which only made an appearance in the smartphone market about a month ago. It will be interesting to see whether or not Apple takes to the idea and what the future will hold for the chip company if it does. I think that Apple may just go for the deal, as Intel's chips do bring longer battery life and improve performance on smartphones. The technology is so advanced that Apple simply cannot afford to ignore Intel as an option when making big decisions about what chips to use. Essentially this will allow Intel to get ahead of its main competitor ARM Holdings (ARMH), the current favorite in terms of chips for a number of Apple products. Intel has finally made it clear that it is serious about the mobile phone market. Some think that it has taken its time reaching this point and may be too little too late.
Although it may, admittedly, have had rather a late start in the smartphone game it seems to me that should Intel's success in making the best chips for smartphones make it a serious force to reckon with going into 2013.
In other chip news, Intel competitor Advanced Micro Devices (AMD) looks to ride its new 'Trinity' chip to new heights. This is the most important product that AMD has ever released and it will soon be launched, hopefully without any trouble. AMD hopes to achieve "smoothness and predictability about its new products so its customers are smiling at the chipmaker and not scowling". Although Intel has always been the stronger force the company feels upbeat about this new product which may give it the edge it needs against its main rival.
Google (GOOG) and Apple, two companies that have long since collaborated with one another, seem to have reached the end of their relationship. This comes with the recent news that Apple plans to oust Google Maps form the new generation of iPhones in order to accommodate new technology from C3 Technologies that will be even better. This means that Google's ex-partner may turn out to be its new rival in yet another area, especially as the new technology introduced by Apple will be a lot more impressive and advanced in a number of different ways. The news is not for Google, though the world waits to see if it can counter Apple's move with a set of more advanced maps again.
Chinese company Baidu (BIDU) plans to very soon enter the smartphone arena just like Intel. Its last phone, Baidu Yi, was simply not a success, mainly because it was too expensive. The company hopes that the new phone, which will run off a new operating system known as Baidu Cloud, will make its presence felt in the smartphone market once and for all. The phone will be the cheapest smartphone to date, and, if it is successful in generating the interest that the company hopes it will generate, then Baidu may take the lead in the industry.
Baidu may not be a big worry for a while. Its sales figures in China will determine whether it even makes a play at the large, international stage. Intel hopes that it can find its way into that limelight, banking on the technological innovation of its chips, a strategy that has served the company well for years before. Watch to see if its chips can boost Windows tablet sales, and if it can secure some large projects. If it does, buy quickly. If not, Intel may still be a good stock to back, if only because it continues to be the leader it was before.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.