What Is Intel’s Growth Strategy for the IoT Market?



Intel’s IoT solutions

In the previous part of the series, we saw that Intel (INTC) launched a suite of hardware and software products in theIoT (Internet of Things) space. The company had announced a series ofIoT-backed products in its Developer Forum in August 2015. The recent launch is in sync with Intel’s promise to help organizations improve their operational efficiency by connecting devices in their business and uploading data from them to the cloud in a secure manner. Let’s now look at the future growth prospects of the IoT platform.

In its press release, the company listed case studies of some of its corporate clients that integrated its IoT solutions to improve efficiency. They include jeans manufacturer Levi Strauss,  industrial technology provider Honeywell (HON), and smart building provider Yanzi.

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IoT outlook

According to IDC (International Data Corporation), the global IoT market is expected to grow by over $5 trillion to reach $7.5 trillion by 2020. Intel is looking to tap a major portion of this market, from embedded devices to storage infrastructure and data analytics.

Intel’s IoT initiatives

Apart from the recent launch, Intel has taken several other initiatives to tap the IoT market:

  • Intel acquired Altera (ALTR) to grow in the data center and embedded space
  • Intel developed a non-volatile memory solution, 3D XPoint, in collaboration with Micron Technology (MU). The new technology is aimed at data analytics, and if it proves a success, might replace the existing memory solutions in the long-run.

Intel eyes IoT to drive growth

Intel derives over 50% of its revenue from personal computer chips, where demand is softening as people move away from PC to mobile. The company is now eyeing the data center and IoT spaces, together contributing more than 30% towards the overall revenue. It’s yet to be seen if the above efforts can compensate for the losses in the PC space and drive the growth of the overall company.

Thr SPDR S&P 500 ETF (SPY) has a 0.89% holding in Intel’s stock. In the next part of the series, we’ll see whose acquisition bid PMC-Sierra accepedt and why.


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