What Intel's New Smartphone Strategy Means For You

| About: Intel Corporation (INTC)

Intel (NASDAQ:INTC) has switched some of its focus from its primary business as a chip maker to the smartphone industry, a move that could be highly beneficial or that could just as easily fall flat.

Intel has finally set its sights on the telecom industry. This is a smart move considering smartphones are what consumers want these days. Not to mention that it could use the diversity in its portfolio. However, I feel that Intel may have entered the market too late. In fact it is safe to say that Intel came literally out of nowhere when it announced its intention a little while ago to become a strong presence in the mobile phone industry. The change from chipmaker to mobile phone manufacturer seems to be a very sudden one for most investors to cope with. The company remains optimistic saying that its technology can help device manufacturers to improve their products. For the sake of the company, and in the hope that it will be able to make big enough of a splash to benefit investors, I hope that it is right.

Intel recently launched its first ever smartphone. The phone, which is known as the Xolo X900, was developed in partnership with Lava. Lava is an Indian based mobile phone manufacturer. India seems like a less than ideal place for a company such as Intel to launch its first ever phone, but you need to remember that the population of India is enormous and ever expanding, providing a big market for new products such as this one. There is another concern on my mind, however, and that is the company's decision to partner with Lava. Lava is a relatively unknown entity and to me it seems obvious that a better strategy would have involved a more well-established manufacturer of mobile handsets. The phone is powered by Intel's Atom Z2460 and the company hopes to work with other phone manufacturers to use its Atom chips in more and more handsets around the world.

The change is a global shift in the chipmakers strategy. The company has recently started collaborating with a number of phone manufacturers and telecommunications organizations across the world in order to make its presence more firmly felt in this arena. Intel is attempting to gain the interest of mobile device manufacturers by introducing new Atom chips. In the very near future ,the company believes that there will be a large number of Intel Atom-powered cell phones on the market in addition to launching its own smartphone options.

Intel faces serious competition in other domains from four of the biggest tech companies that are currently out there.

Four of the biggest tech companies, namely Advanced Micro Devices (NYSE:AMD), ARM Holdings (NASDAQ:ARMH), MediaTek, and Texas Instruments (NYSE:TXN), have banded together to explore heterogeneous computing. The four companies together are known as the Heterogeneous System Architecture (NYSE:HSA) Foundation. The HAS is a nonprofit foundation that is aimed at discovering exactly what the capabilities of Graphic Processing Units really are. I feel that this collaboration is a step in the right direction for tech stocks as this is what we need to move forward and to continue advancing in the industry.

A leader in this industry at present is Broadcom (BRCM), and it is easy to see why. The company is the first to develop "System on a Chip (SoC) devices to deliver the potential of 5G WiFi with high-bandwidth Gigabit connectivity". This means that it is now the producer of the fastest and most reliable connections for your home as well as for small businesses. The news is extremely important in that the new offering from Broadcom outperforms existing technology by about ten times. If you are looking for a tech stock to trade, look no further.

IBM (NYSE:IBM) is addressing a growing concern faced by many organizations, both governmental and non-governmental: the safety of mobile apps. Mobile apps are becoming more and more essential, but unfortunately they also leave certain systems vulnerable to attacks from the outside. IBM has developed a software portfolio that allows for a more "baked-in" approach to app security. For example, organizations will now be able to test their apps for themselves for safety instead of sending them off to be tested elsewhere. This is a breakthrough in security.

Competitor Micron Technology (NASDAQ:MU) is making its mark in the tech industry by being the producer of the world's fastest DDR3 memory chips. For a chip producer, which Micron primarily is, this is a great milestone and a significant breakthrough to have to its name. In addition, the chips can be used in multiple applications with ease. In my mind this makes Micron a good bet to back. When we look at a tech stock, we want to see is innovation and advancement, something which Micron is able to consistently provide its investors with.

Intel may have the right idea in that it wants to get involved with the mobile market. People in this modern day want smartphones, and that demand should continue on indefinitely. If Intel can successfully enter this domain, it will have a positive effect on the stock. That goes without saying. However, I feel that it may have joined the game too late to really take off. If it wants to be a leader in the smartphone industry, it will have to introduce products that are significantly more innovative than those that we currently have, something which we are just not seeing form the chipmaker. The smartphone setback aside, Intel remains a fairly stable stock. If it does happen to find success with its phone, you can expect a significant period of profit, though. So, let's hope that comes to fruition.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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