Intel Corporation Lands a Solid Smartphone Design

By Markets Fool.com

As an Intel investor, it has been frustrating to watch the company's mobile efforts. Intel has made progress in tablets, although a not-so-small part of that success has come from providingcontra-revenue support to offset platform-level deficiencies for its products. In smartphone applications processors, though, Intel's efforts have thus far all been too little, too late.

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However, at this week's International CES in Las Vegas, Asus, one of Intel's key PC partners, announced its next-generation ZenFone 2 lineup of smartphones. These will be powered by Intel's 22-nanometer Moorefield platform, and look to be fairly reasonably priced.

Asus ZenFone 2 -- powered by Atom Z3560/Z3580
Intel announced its Atom Z3580 at the 2014 Mobile World Congress; according to the company's processor database, the chip launched in the second quarter of 2014. The chip showed up in the Asus Memo Pad 8 and the latest Dell Venue 8 7840, and is slated to be featured in the Nokia N1 tablet, but it had not shown up in a publicly announced smartphone design. Until now.

The Asus ZenFone 2 family of phones feature Intel's Atom Z3560 in cheaper configurations and the Atom Z3580 in more premium configurations. The phones themselves look to have solid hardware specifications, with 802.11ac Wi-Fi, category 4 LTE, up to four gigabytes of memory, and up to 64 gigabytes of storage; the devices start at $199.

The ZenFone 2 phones don't seem to be Samsung Galaxy-killers, but they look to have solid features and performance for the price. The Z3580 should offer graphics and CPU performance in the same ballpark as market-leader Qualcomm's Snapdragon 805 processor from last year, which is still quite respectable.

Asus said the phone supports category 4 LTE speeds, which suggests it features an older-generation XMM 7160 LTE modem. That would mean this family of phones won't offer the fastest LTE speed around, but it should be solid for the devices' relatively low price points.

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This is a nice win, but 2015 isn't likely to be a game changer for Intel in phones
While the Z3580 should offer a solid user experience in these new phones, Intel still seems relegated to relatively budget phones from "friendly" partners in the PC market with the Moorefield platform. I don't believe the Z3580 has sufficiently premium features and performance to compete with the best from Qualcomm (or even MediaTek) in the high end, nor are the platforms integrated or cheap enough to really succeed in the low end of the smartphone market.

Intel claims that its first integrated 3G and LTE smartphone-targeted system-on-chip products are on tap for launch later this year for value and mainstream phones. If Intel plays its cards right with these platforms -- which, the company says, will not require contra-revenue to offset platform bill of materials deficiencies -- they could see relatively robust adoption.

The Z3560/Z3580 chips are simply in the awkward place between premium system-on-chip products such as the Snapdragon 808/810 and low-cost chips such as Intel's upcoming integrated parts and parts from Qualcomm and MediaTek, which is why I don't think we'll see them in more than a handful of designs beyond the ZenFone 2.

That said, even with the improvement in smartphone penetration that I expect with the upcoming integrated parts, as well as whatever wins Intel gets with the Z3560/Z3580, I don't think the chipmaker's smartphone story becomes interesting until 2016. There's still significant risk that Intel's 2016 mobile plans fizzle out, but if it can deliver on the road mapit laid out back in November 2014, then the company's fortunes in smartphones could improve nicely next year.

The article Intel Corporation Lands a Solid Smartphone Design originally appeared on Fool.com.

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.