Where the Market Stands
Qualcomm is the market leader in the smartphone chip making business, an industry that is rapidly growing year in and year out. The company is delivering new Snapdragon 800 and 600 processors. The Snapdragon 800 processors will produce a higher performance than the Snapdragon S4 Pro processor with exceptionally low power. This could be a winning play for the company as consumers continue to push for efficiency. The company’s profits surged 36 percent for the most recent quarter, and analysts predict continuous growth as consumers shift to the usage of smart devices.
Meanwhile, Apple, which lies on Qualcomm’s supply chain, is looking to diversify its business further by widening its investment in software and services. The company’s device sales are facing declining gross margins as the tablets and smartphones battle hits up. Chinese manufacturers are putting a strain on Apple’s premium priced devices, with Huawei and ZTE cannibalizing the emerging markets. Apple, has seen its business slip drastically, and recently produced a pessimistic guidance on the sales from its Mac unit. Analysts are also skeptical on Apple’s sales growth rate in 2013, a stance reflected in the company’s recent guidance.
Intel’s downside in its PC chip making business is Qualcomm’s advantage in mobile chip making. You could say that the monster that eats on Apple’s PC sales is likewise stepping on Intel’s business. Intel also supplies computer chips to other PC makers like HP, Dell, and Lenovo. However, none of these customers are having a good time with their PC business, hence the necessary measures taken by Intel to come up with new technology that could change all that.
The Bottom Line
Qualcomm’s business in the mobile devices chipsets remains a dominant force in the semiconductor industry. Apple’s iPads, coupled with other tablets from rival firms like Amazon and Microsoft, are threatening to render personal computers obsolete. Intel’s newfound technology would thrust it back into the mix of things. It is no longer enough to say “Intel Inside.” But the interactive interface technology could yet give birth to a new slogan that could go on to dominate the PC industry for ages.
This Silicon Valley giant is definitely set for what could become one of the most intriguing turnaround tech plays in the industry. So far the symptoms of failure are next to null, with a probability of realizing patent royalty revenue in the long-run as rivals join the fight. Intel’s upside is based upon the success of its new technology. Luckily for Intel, it has a ready market that is hungry and willing to get back to business in a more competitive capacity. Lenovo, HP, Apple, and Dell would be looking to redefine their PC business with this technology, so watch out Qualcomm.
The article Perceptual Computing is Intel’s Ace for the PC Business originally appeared on Fool.com and is written by Nicholas Kitonyi.
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