Intel has to addaress 3 problems to address.

1) PRoblem #1: The smartphones and tablets value communication and media, processor is an afterthought. That puts value to QCOM who is innovating on the ‘connector’ and Nvidia who is innovating on the ‘media’.
2) Problem #2: Leadership. Paul would retire anyday. Sean got into a medical problem. Rest of the leadership is not strong to take Intel to the next level. Moreover. Intel has always grown leadership form within and that style is no longer viable in the new era. Need aggressive, fast turn around SoC with innovatin on both hardware and software.
3) Problem #3: Smartphones and tablets are eco-system plays. Not just Processor, or operating system. Like what happened to Alpha (2X over others), with SPARC (2X over other for throughput), the architectural wind has moved to eco-system and Intel is not just on the wrong side of architecture, but on the platform and eco-system.

How to address all 3 of them?

Buy Nvidia

1) Buying Nvidia addresses the Hardware (ARM/SOC, media processing).
2) Buying Nvidia addresses leadership. The culture of Nvidia bring the right CEO (Jensun Huang – hard knocking driven given) and a culture of aggressively beating out competition. Nvidia came from #27 in graphics to #1. That is its culture. Intel’s culture is win around its defensible turf (x86 and process). Intel needs an outsider CEO. The inside leadership don’t cut it
3) Anand Chandrasekhar despite having had success with Centrino, failed on a number of things with Atom, Smartphones, tablets. Bet on Mobilin, on Meego. Too much NIH. Intel has all the assets with Nvidia acquisition including leadership and everything non-apple (Windows eco-system and Android). They can take a pole position in tablet outside of iPAD and work their way.

The ARM vs x86 is a pointless arguement. In my mind its a religious argument. There is no hard evidence to say that ARM is anything greater than 1.25X over any x86 w.r.t power/performance. Intel has lost the marketing war on this war. ANycase, its no longer the ISA wars. Its media, connectors and eco-system. If you don’t have it, you loose. QCOM lacks the media and both Intel and QCOM are even keel on eco-system.

An Nvidia acquisition will make this a 2 horse race with QCOM. Otherwise expect QCOM to overtake INTC market cap within 18 months. Time is now. I am sure Jensen will take the offer if he is the CEO and that is the right thing for both companies. It also bolsters Intel’s Server/HPC/graphics. Its no longer an FTC issue. (AMD has ATI)

Since Grove left, Intel has been led by people who don’t have the vision or insight that Grove always provided. The bland leadership has made Intel just another semiconductor company that will bounce around in the market looking for a place to recoup its huge investment in advanced manufacturing.

It is this change in the company dynamic that has resulted in a complete fail on the mobile market and will continue to dog it until there is new leadership. That’s not to say that any of the other processor manufacturers have the kind of visionary leadership that is necessary to be more than a commodity manufacturer – different companies will look strong at different times with nobody sitting on top.

Intel still may have a chance to succeed – not on its own; but buying into this market. What do you think about them buying Nvidia. It not only gives them entry into ARM based chips; but also nice graphics functionality – two areas that will see more and more action in the coming years.