Stay on Top of Emerging Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Intel’s well-documented failure to capitalize in the mobile transformation of computing leaves it with little choice but to use its prodigious wealth to try and jump-start demand for a new category of products. A $300 million investment fund may encourage system builders to try their hands at Intel’s “ultrabook” concept, but the market itself seems to be moving in a different direction.
Last May at Computex, the PC industry’s annual confab in Taiwan, Intel (NSDQ: INTC) announced that it would be putting design and system development resources behind ultrabooks, which are basically thin-and-light netbooks only far more powerful than their stripped-down older brothers and with “tablet-like features,” according to an Intel press release announcing the new fund. Intel Capital, the company’s investment arm, will be distributing the funds over a several year period to companies that will use forthcoming Intel chips in their designs.
Intel has controlled the market for PC and server processors for decades, but is merely watching as a different set of companies build out the smartphone and tablet market around chips based on designs by ARM, a U.K. chip design company. All modern mobile software is designed to run on ARM chips, and Microsoft (NSDQ: MSFT) announced earlier this year that it would create a version of Windows 8 that can also run on ARM chips.
That leaves Intel in a tough spot. It saw this market coming an awfully long time ago but has been unable to convince any mobile device makers that being able to run software designed for the PC is a benefit worth overlooking Intel’s struggle to reduce the power consumption of its chips. The Wall Street Journal reported that Apple (NSDQ: AAPL) warned the company to reduce its power consumption or lose Apple’s business, ostensibly paving the way for a shift to ARM chips in the Mac if Apple felt it warranted. That’s a problem for a company that needs to keep its chip factories operating at maximum capacity in order to hit its profit targets.
Ultrabooks may help traditional PC companies win back some customers who have ditched notebooks for tablets only to find they still need some kind of keyboard. But it’s hard to know for sure until a few designs appear, which Intel said would arrive in time for the holiday shopping season this year.