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Intel Has Beautiful Mobile Dreams, but I'm Going to Crush Them With My Eighth Grade Math Skills


Intel still remains challenged within the hot mobile device market.

MINYANVILLE ORIGINAL On Tuesday, Google's (NASDAQ: GOOG) Motorola unit launched the RAZR i, which made news for being powered by an Intel (NASDAQ: INTC) processor rather than the ARM Holdings (NASDAQ: ARMH)-based designs upon which most mobile devices run.

If you're new to the mobile-processor world, things pretty much work like this: Semiconductor companies, including Qualcomm (NASDAQ: QCOM), Samsung, Texas Instruments (NASDAQ: TXN), and NVIDIA (NASDAQ: NVDA), produce processors based upon design technologies licensed from ARM, and sell those to the gadget makers.

Virtually ever smartphone of note, like Apple's (NASDAQ: AAPL) new iPhone 5 and Samsung's Galaxy S III, runs on an ARM-based design.

Though there aren't any in-depth reviews of the RAZR i, news reports indicate that it is a pretty solid performer from a technical perspective.

So is Intel getting in with Motorola a big deal?

Intel Needs the Mobile Market

Before getting into all that, let's quickly examine why Intel needs the mobile market.

This is pretty simple -- it's all about growth. In the second quarter of this year, global PC industry unit shipments fell by 0.1%, according to IDC.

On the other hand, smartphone sales were up 42.1%, while tablet sales rose 66.2%.

Now let's think about what cozying up to Motorola/Google could mean for Intel.

Well, right off the bat, it's important to note that Motorola's global smartphone market share is tiny. It doesn't even make the top five. IDC puts China's ZTE in the number-five slot with 5.2% market share. So Motorola is below that, making it at most, less than a sixth the size of market leader Samsung, which has 32.6% market share.

So it's obvious that partnering with Motorola does not move the needle for now.

If the RAZR i had a bigger geographic release slate (it is not coming to the key US market) and offered some obvious advantage over the S III, then maybe we could jump up and down. But for now, there's just not much to get excited about.

In the future, assuming Intel and Google collaborate more closely on optimizing hardware/software combinations, Intel could gain a performance advantage over ARM-based designs from the likes of Qualcomm and NVIDIA. I recommend watching this issue closely, as it could make ARM a great short in the future.

But let's step back to the industry for a moment. While the smartphone market grew by 42% in Q2, some eighth grade math indicates that things are not all joyous.
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