uploads/2015/12/Series-39-A121.png

Intel Increased IoT Growth to Compete with Qualcomm

By

Updated

IoT growth

The third point of Intel’s (INTC) growth circle is IoT (Internet of Things). So far, we saw that the company’s dominant position in the data center space and its breakthrough memory technology create high growth potential. What about IoT? It only accounts for 4% of the company’s revenue.

Intel’s key focus area is the IoT platform. Recently, it launched a new hardware and software designed for IoT. It also partnered with some hardware companies like Hewlett-Packard Enterprise (HPE) to develop gateways.

Article continues below advertisement

Intel lags behind Qualcomm in IoT technology

However, Intel faces tough competition from Qualcomm’s (QCOM) cost and power efficient ARM processors. These processors hold more than 50% of the embedded connectivity market, according to the ARM Holding’s fiscal 3Q15 earnings presentation. Embedded connectivity is a combination of an ARM embedded controller and Wi-Fi and cellular communication chip modems.

Qualcomm already leads in the communication modems. Intel is still developing its LTE (long-term evolution) modem. Qualcomm offers a combination of X12 series modem and Snapdragon 820 SOC (system on chip) for the IoT sector. This gives its a competitive edge over Intel.

Intel’s strategy to compete with Qualcomm

To increase the network technology development, Intel appointed Qualcomm’s former executive vice president, Dr. Venkata Renduchintala, as the president of its client and IoT business and systems architecture group. Also, the company partnered with HPE to deliver IoT solutions.

Intel and Qualcomm’s IoT conflict

Through their consortiums, Intel and Qualcomm are fighting to get control of IoT communication standards. However, Qualcomm’s AllSeen Alliance has twice as many partners as Intel’s Open Internet Consortium. This conflict could be negative for the overall IoT growth. It would delay the adoption of a universal standard for IoT communications.

Alphabet (GOOG)-backed Thread Group is studying Intel and Qualcomm’s IoT connectivity framework. If either of the companies strike a partnership with Thread Group, it would create a large IoT communication standard.

In the next part of the series, we’ll analyze Altera’s role in Intel’s three-point growth circle of the data center, IoT, and memory. You can get a share of the IoT semiconductor trend by investing in the Technology Select Sector SPDR Fund (XLK). It holds 3.3% in Intel and 1.9% in Qualcomm.

Advertisement

More From Market Realist