Can Intel Corporation (INTC) Really Hit?

The key factors will probably be how well Haswell and Bay Trail are adopted by original equipment manufacturers (OEMs). Intel is trying to muscle its way into the ultra-mobile market currently dominated by ARM Holdings plc (ADR) (NASDAQ:ARMH)‘  processor designs. This is becoming an ever-more-important battle because — as demonstrated above — the trend towards mobile devices is accelerating. So far, the refusal to license ARM-based architecture for its chips has seen Intel struggle to compete against competitors like QUALCOMM, Inc. (NASDAQ:QCOM) in the mobile device market.

In the end, the key decision makers in the Intel vs. ARM Holdings plc (ADR) (NASDAQ:ARMH) battle are going to be the device makers. If the latter are confident that they can create commercially viable products via shifting to Intel, then the battle will start to be won. Moreover, you can form your own view by looking at which tablets, ultrabooks, and mobiles are starting to be released with Intel chips.

The bottom line

In conclusion, the second half promises to be a better one for Intel — and it needs to be, for the company to hit its guidance. Thinking longer-term, even if Intel does fail to establish itself in the ultra-mobile device market, it could always change tack in future and start to license ARM’s core technology. This is something for investors in ARM (positively) and QUALCOMM, Inc. (NASDAQ:QCOM) (negatively) to ponder.

However, the near-term risk is if Intel misses the targets outlined above. Frankly, I think Intel will have challenges to hit these targets. But in any case, its valuation of around 12 times earnings will make it attractive to value investors who can stomach near- to mid-term volatility.

Lee Samaha has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, Microsoft, and Qualcomm.

The article Can This IT Giant Really Hit Its Guidance? originally appeared on Fool.com and is written by Lee Samaha.

Lee is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.