Boston, MA 01/20/2014 (wallstreetpr) – At the previous earnings call, Intel Corporation (NASDAQ:INTC)’s Chief Financial Officer Stacy Smith made a statement that kind of escaped many investors, or better yet, analysts. The company said that it expected its chips to be in more than 40 million tablets by end of this year. This was startling given that tablet and smartphones have remained tricky markets for the company.
But the company went further to reveal, though in financial jargon veiled statement, how it hopes to attain this penetration target.
In order to bridge the gap in the tablets market, Intel Corporation (NASDAQ:INTC) is hoping that bankrolling customers will work the magic. Although the company built Bay Trail processor for the high-end market, the slow progress it is making has now forced the company to help low-end tablet manufacturers to adopt the chip.
Given the cost factor involved in adoption of Bay Trial, Intel is paying customers to use the chip. Perhaps the question that investors might be concerned about is the viability of this approach and whether it can lead to more problems in the future.
New approach sales deals
Well, as the tech industry turns red-hot, companies are devising every trick in the book to help them remain relevant in the market. Just last month, Microsoft Corporation (NASDAQ:MSFT) was reported to be in talks with Sony and other smartphone makers to adopt its Windows Phone OS for their future smartphones. On its part, Microsoft will serve those who agree to the deal incentives in form of reduced patent licensing fee.
It is therefore not unusual that Intel Corporation (NASDAQ:INTC) is willing to pay customers to use its chips. In the end, it will be a win-win situation for the company and its customers. So then, investors need not worry about paying-for-adoption.
Intel’s other agreements
Intel Corporation (NASDAQ:INTC) is also in talks with Samsung Electronics for the development of a mobile OS called Tizen that will rival Google Inc (NASDAQ:GOOG)’s Android. This agreement brings together several other mobile manufacturers including NEC and Fujitsu. This deal gives Intel Corporation (NASDAQ:INTC) chips supply advantage, almost the kind that Advanced Micro Devices, Inc. (NYSE:AMD) enjoys in supplying Microsoft and Sony with semi-custom chips used in their latest game consoles Xbox One and PlayStation4 respectively.
