Intel last year introduced a tag line, “Look inside,” that evokes its long-running “Intel inside” cooperative ad program started in the early 90s. But the chipmaker is still trying to update its business for the mobile era. Intel on Tuesday reported that its mobile and communications group had an operating loss of $1 billion in the third quarter.
That figure highlights how the company has lagged in getting its products inside smartphones and tablets as shipments of the former have outstripped PCs, with tablets expected to do the same by next year. Mobile devices only account for a fraction of Intel’s business, while technology from Britain-based rival ARM Holdings dominates the space.
Trying to catch up, Intel has set a goal of having its chips used in 40 million tablets this year, up from a quarter of that amount in 2013. In the latest quarter, the company said it was on track toward that objective, with tablet volume of 15 million. A Reuters report noted that Intel currently provides subsidies designing tablets with its chips, requiring more costly memory and other components driving up costs.
Those manufacturers don’t include Apple, which has designed its own ARM-based chip for the iPad, the latest version of which is set to be introduced tomorrow.
But during Intel’s earning conference call yesterday, company executives emphasized that the intellectual property it’s developing extends to a range of devices beyond PCs. Referring to its Atom processor, for example, CEO Brian Krzanich said: “We’ve purposely evolved that IP to the point that it now spans from smartphones to tablets and mainstream PCs and from storage, networking and compute devices in the data center to the Internet of Things.”
Intel’s Internet of Things business, while still small for a company with $14.6 billion in quarterly revenue, already looks like more of a bright spot than its mobile division. Revenue was up 14% from a year ago to $530 million in the quarter, with the company having launched its Edison embedded chips geared toward wearable devices.
Whether Intel undertakes an ambitious TV or cross-platform campaign to more closely associate its products with mobile devices or the Internet of Things remains to be seen. Given the latter category is still quite nascent, that might be premature. But its informational Web page for the Intel Inside program only refers to advertising related to “computer systems” aimed at “computer buyers.” It could start by updating that language to refer as well to tablets, smartphones or other devices if that’s where it really sees its business going.