Intel (NASDAQ: INTC) Looking to Become More Than just a Chip Company

Microchip, Texas, Qualcomm, Nvidia, ARM holdingsAfter the successful partnership with Apple (NASDAQ: AAPL), Intel (NASDAQ: INTC), the multinational computer chip maker, wants to see their new Atom processors give life to a wider range of devices.

The Intel Atom was introduced in 2008 as a low voltage microprocessor originally designed for netbooks and netops. In 2012, Intel modernized the Atom brand, turning it into a System on Chip (SOC) platform, which is suitable for Smartphones and tablets. Since then, Intel’s Atom aggressively competes with other SOC processors manufacturers like Samsung, Nvidia (NASDAQ: NVDA), Qualcomm (NASDAQ: QCOM) and Texas Instruments (NASDAQ: TXN). All these companies use CPU hardware that is based on Cortex-A processors sold to them by ARM Holdings (NASDAQ: ARMH).

In the Personal Computer market, Intel leads by a margin, yet in the mobile and tablet market, things are not going so well. Their processors cost slightly more which will cause the prices of the devices themselves to be slightly higher. When it comes to performance, the difference is unnoticeable for an untrained eye. 

For 2014, Intel came up with a new strategy – offer some cheaper quad core tablet SOC processors, and also to help tablet manufacturers to cover the cost of using their Atom chips instead of ARM’s. Intel hopes to power four times more tablets in 2014 than 2013.  Of course, this revenue killing move was not designed for immediate profits and meant to be beneficial in the long run.

Intel can afford to sacrifice a little in order to catch up with the competitors. The profit margin of the company is constantly increasing, standing now on 17. 97%. The debt-to-equity ratio is low, 23.19%, which is lower than the industry’s average, indicating reasonable debt levels.

As for immediate profit, Intel had some big, as well as small announcements this week. The company is trying something outside their specialty of hardware components and decided to develop a messaging app. A very fun one.

The app was released this Thursday and is available both on iOS and Android, it’s called Pocket Avatars, and uses an animated 3-D facial recognition technology which will turn your face into a funny cartoon. To all the massaging addicts among us, this free app sounds like a must have. Innovative messaging apps or over-the-top massaging apps as they are called in the market will soon become the norm, and since Intel was late to join the Smartphone shenanigans when it comes to hardware, they decided to try to become a major player in the market when it comes to software. Good luck!

Back to hardware. On Wednesday, Intel introduced quite an important chip. The company’s Xeon processor will increase the speed of large computer systems and heavy loads of data. Complex algorithms, like the ones used for YouTube (NASDAQ: GOOG), or Facebook (NASDAQ: FB), will work twice faster as before. From the description of this new cool chip, we can assume that not many clients are going to need it, but the ones that will are some of the biggest companies in high-tech. Since the personal computer market is in decline, helping corporations to excel further seems a logical move.

Looking back at June 2013, we can see that Intel didn’t enjoy from consistent growth in stock value throughout the year, but soon after every major decline came a stronger incline, proving that the strengths of the company are stronger than its weaknesses.

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