Is Intel a Buy With This New Chip on the Market?
In his opinion, the development of the Intel Atom chip, a line of ultra-low-voltage x-86 microprocessors, has made Intel a beneficiary of the rapidly increasing market for mobile devices like smartphones and tablets.
Intel has espoused this opinion as well. “As public clouds continue to grow, the opportunities to transform companies providing dedicated hosting, content delivery or front-end Web servers are also growing,” stated the company in a press release announcing the chip’s debut. Despite an early reluctance to pursue the chip’s development, Intel has been forced to develop low-power processors to keep the business of its four largest cloud customers, Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), and Microsoft (NASDAQ:MSFT).
While Wong noted that Intel’s server processor revenue grew 7 percent in the first three quarters of 2012, as compared to the company’s total 1 percent growth decline, Intel remains behind the competition. Before 2011, Intel “actively denigrat[ed] the idea of lower performance but power efficient chips in the data center,” according to GigaOm, and as a result of this stance, other chip manufacturers like Advanced Micro Devices and ARM (NASDAQ:ARMH) have developed a competitive advantage. Intel’s late entrance to the market enabled AMD to acquire the low-power server specialist SeaMicro in February, and helped ARM put its designs in the smartphones and tablets of Apple (NASDAQ:AAPL), Microsoft, and Google…