Intel partners with China's Rockchip to take on Qualcomm/MediaTek

|About: Intel Corporation (INTC)|By:, SA News Editor

In a surprising move, Intel (INTC +1%) will work with Rockchip, a fabless Chinese chipmaker known for its ARM-based mobile processors, to develop a baseband/app processor based on Intel's SoFIA platform. The product will be aimed at the low-end tablet market.

The Intel/Rockchip solution will pair a quad-core Atom CPU with a 3G modem, and is expected to launch in 1H15. Intel already plans to offer a dual-core 3G SoFIA part for the large but cost-sensitive low-end Android phone market by Q4, and to offer a 4G version in 1H15.

Intel hopes the tie-up will help it be more price-competitive in a baseband/app processor market currently dominated by Qualcomm (QCOM +0.5%) and (to a lesser extent) MediaTek. Strategy Analytics estimates Qualcomm had 64% of the 2013 baseband market, MediaTek 12%, and Intel 8%.

The announcement comes as Intel gets set to launch Moorefield, a standalone app processor for sub-8" tablets. Moorefield is smaller and runs cooler than Bay Trail, which launched last fall.

Intel, which aims to ship 40M tablet CPUs this year, reported a giant $3.1B 2013 op. loss for its mobile reporting unit, thanks in part to marketing subsidies to OEMs. Morgan Stanley estimates the business will need to reach $8B-$10B/year in sales (up from 2013's $1.38B) to break even.