Far behind rival Qualcomm <QCOM.O> in mobile devices, the upcoming
tablets are the result of Intel Corp's <INTC.O> strategy to sell
chips this year at a loss in a bid to stake out badly needed market
share. Intel is betting that in the future, its customers will keep
using Intel chips without the discounts.
Toshiba <6502.T> this week announced six tablets and PCs with
detachable screens made with Intel chips, one of which runs the
Android operating system and the rest Windows. More Intel-based
tablets will start hitting U.S. store shelves in June and July for
back-to-school shoppers, Erik Reid, general manager of Intel's
Mobile Client Platforms unit, told Reuters in a recent interview.
"It will be a new high-water mark, to be eclipsed by another
high-water mark at the holidays," said Reid, who is managing Intel's
With the PC industry shrinking, mobile devices and other new markets
have become a top priority for Intel. Most tablets are made with
chips from Samsung <005930.KS>, Qualcomm and other companies that
use low-power technology from ARM Holdings <ARM.L>.
Earlier in May, CEO Brian Krzanich told Reuters that Intel was well
on its way to reaching his goal for the company to increase its
sales of tablet chips this year to 40 million units.
After shipping 5 million tablet chips in the first quarter, Intel is
on track to meet a target of 7.5 million such chips for the June
quarter, Krzanich said.
"We're on schedule to hit that number and we'll see if we can do
better than that," he said.
Global tablet shipments from all manufacturers in 2014 will grow 12
percent to 245 million, less than a previous forecast of 261 million
devices, because people are keeping their devices longer, market
research firm IDC said on Thursday. Intel sold around 10 million
tablet chips last year.
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Manufacturers have launched a handful of Windows tablets running on
Intel's newest Bay Trail chips, but those chips have been slow to
appear in devices running the popular Android platform.
On Tuesday, Intel announced a deal with Chinese chipmaker Rockchip
to make components for entry-level Android devices aimed at local
consumers in China.
Partly reflecting the financial incentives Intel is offering
manufacturers to use its tablet chips, the company's mobile and
communications group had an operating loss of $929 million in the
April quarter on revenue of only $156 million.
As well as big PC brands increasingly making tablets, Intel expects
small manufacturers making devices for China's domestic market to
play a major part in reaching its 40 million chip goal this year,
"We're confident, but this is by no means saying it's in the bank."
(Reporting by Noel Randewich; Editing by Jonathan Oatis)
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