Apple and Intel Face Challenges As Both Eye Emerging Mobile Computing Market (INTC, AAPL, XOM, ARMH, GOOG, MIPS, DELL, HPQ)
The road for technology-based companies is rarely smooth, even for long-term industry stalwarts like Intel (INTC), or red-hot industry juggernauts like Apple (AAPL). Both companies currently face significant challenges as they attempt to pursue long-term objectives, particularly in mobile computing where both companies continue to vie for position in the rapidly growing and maturing marketplace.
Apple has ridden a wave of popularity for its handheld entertainment, communications, and computing platforms. But the company now must move ahead for the time being without its visionary leader Steve Jobs. The company reported this week that Chief Operating Officer Tim Cook will again take over the day-to-day operations of the company, as Jobs takes a medical leave of absence. Cook has previously served admirably when pressed into duty as Jobs has battled cancer.
Jobs’ decision to step aside comes as Apple has never been more successful. The ubiquity of consumer products such as its iPhone has enabled the company to become the second most highly valued public company in the world behind ExxonMobil (XOM). That has been a pretty remarkable rise over the past two years for Apple, particularly for a company that for most of its existence has struggled to move from “cult” status to market dynamo.
Intel, meanwhile, has built a semiconductor empire as the leading provider of processors for PCs and servers for the past few decades, but has struggled over the past number of years to gain traction as a provider of processors for handheld computing applications. Designs based on ARM Holdings (ARMH) processor IP have dominated the cell phone market, while Intel has largely failed to this point in attracting significant customers for its ATOM-based mobile computing processor.
Both Intel and Apple covet the emerging handheld computing market, where platforms like tablets and netbooks are expected to begin gaining increasing traction over the next few years. While Apple has plenty of momentum, there is concern that Jobs’ health issues will keep the company from moving forward in its attempts to fully capitalize on the growing Apple ecosystem as consumers more rapidly adopt new computing platforms.
As an ARMH architectural license holder, Apple is expected to continue to rely on ARM-based processing cores for its handheld computing platforms, potentially integrating technology acquired from the PA Semi group. It also will encounter greater competition from such major technology players as Google (GOOG) and its Android-based mobile computing platform.
Intel believes after years of work to establish ATOM as a viable low-power processing engine for mobile applications, it is finally set to take off with design wins as the mobile computing market in general expands. It’s also expected that MIPS Technologies (MIPS) could become a greater factor in providing processor core technology for emerging mobile computing platforms.
In NextInning.com’s series State of Tech reports, Editor Paul McWilliams takes an in-depth look into the strategies of both Intel and Apple for the year ahead, with a particular focus on how the two companies will engage in the emerging mobile computing and communications market.
These reports, examining both Intel and Apple, as well as other market leaders including ARM Holdings, MIPS Technologies, Dell (DELL), and Hewlett-Packard (HPQ), are available to free trial subscribers at NextInning.com. NextInning.com has covered the tech sector since 2002, and NextInning.com’s model tech portfolio is up 377% since inception, more than nine times the 43% return for the S&P 500 over the same period.
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