Intel Corp.'s Mobile Group Continues to Disappoint

It has been nearly two years since Intel hosted its 2013 investor meeting. This one was of particular importance as the company disclosed quite a bit about its future mobile processor plans. At the time, Intel executives said that it would roll out a flurry of new mobile-oriented products in the 2015 time frame.

In particular, Intel had promised an applications processor with integrated LTE known as SoFIA LTE built on a third-party 28-nanometer manufacturing process for the "value" segment of the smartphone/tablet market. In addition, it promised a high-end applications processor for phones and tablets (without an integrated modem) known as Broxton during that same time.

Broxton was eventually delayed into 2016, and -- per comments from Intel executives on the company's July 15 earnings call -- its first SoFIA LTE part has been pushed from what seemed to be mid-2015 into the first half of 2016. Additionally, Intel executives said that the company's first SoFIA part built by Intel in its own manufacturing plants is now delayed into the "back half" of 2016 (from what was initially a late 2015/early 2016 target).

This is absolutely dismal executionIn the merchant mobile processor market, there are two main players: Qualcomm and MediaTek. Both of these companies release many mobile processors per year, and a large portion of them feature integrated cellular connectivity.

Intel, on the other hand, seems to be having significant difficulty getting its first integrated LTE parts out into the marketplace.

To make matters worse, on the earnings call, Krzanich said the following with respect to the company's cost-reduction efforts in its mobile group:

How can Intel claim that it wants to be a major player in the mobile market, but at the same time say that in order to save some money, the company is just fine with a delay with an important product?

SoFIA LTE will be mediocre by the first half of 2016At the Mobile World Congress earlier this year, Intel officially outed the specifications of its SoFIA LTE part, officially known as the Atom x3. It has four Intel Silvermont cores running at up to 1.4GHz, ARM Mali-T720 graphics, and a category 6 LTE-Advanced modem.

This would have probably been passable if it were a mid-2015 part, but in early 2016 it will face some pretty stiff competition from the likes of Qualcomm and MediaTek. For example, the Qualcomm Snapdragon 425 has up to eight ARM Cortex A53 cores running at 1.7GHz, and an integrated category 7 LTE modem.

Qualcomm's Snapdragon 425 is also expected to show up in commercial devices by the second half of 2015, coming in well before Intel's Atom x3 part.

Something is rotten inside of Intel's mobile groupIntel is a great company that makes some incredible products, but in the world of mobile processors, the company never fails to disappoint.

How can a company with such a large research and development budget and a rich heritage of developing world-class computing products routinely fail to deliver in the market for smartphone chips?

The smartphone revolution has led to a proliferation of computing devices, and given Intel's strengths in chip design and manufacturing, this should have been a great source of growth for the company.

Intel still has the opportunity to get in on this growth, but I sense that there is something fundamentally wrong with the company's mobile product development efforts. Until it can fix these issues and consistently deliver competitive products, it's not clear if it will ever be a major player in the market for mobile chips.

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Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool recommends Intel and Qualcomm. The Motley Fool owns shares of 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.

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