The end of the Intel Atom raises many doubts about the future of Intel. It shouldn’t. If anything, the future of the company is probably clearer today than ever.
It’s always bad news when a company announces mass layoffs, and if that means losing 11% of the workforce, even more. 12,000 people will receive the dreaded notification in the remainder of the year, and how could it be otherwise, the production of processors will be seriously affected.
So along with the restructuring, Intel has also made other announcements related to its future, canceling some projects and focusing on others, facing the next decade in conditions. Although that supposes leave the most important sector today.
The end of the Intel Atom is coming
Indeed, where Intel has cut more has been in the development of processors and SoCs for smartphones and tablets, not in the development of PC processors.
The immediate consequence is that the Atom processors have come to an end. The next Broxton architecture for Atom processors has been canceled, in addition to the next SoC of the SoFIA range low cost. Both were products based on the 14nm manufacturing process, and we expected them for this same 2016, so their development was almost finished.
It is strange that a company cancels a project so late, since the cost of manufacturing the chip is much less than the entire research and development process it has taken. This should indicate to us that Intel’s decision to abandon smartphones and tablets is very serious. If we only read the headlines of recent years, this would seem crazy to us.
The PC market is in every constant, and there is no sign of recovering. Sales data is between catastrophic and poor, and affects virtually all manufacturers. Not even the arrival of Windows 10 has managed to revitalize a market that is stagnant at the moment. There are some details that invite optimism, although they are not many.
And yet, Intel continue development of PC processors; Even Brian Krzanich, the CEO of Intel, has dared to dismiss the rumors of the death of Moore’s Law that has led the way for PC processors for decades as exaggerated, and has promised new investments in research and development of new silicon chips.
Where does that certainty come from that everything will go well if Intel focuses on the PC market? Athough it does not seems, Intel has very good reasons to abandon the mobile market.
Intel was never a serious rival in the mobile market
Let’s be honest, Intel has been promising revolution in the mobile market for years, and has not arrived. Each new processor was released with the promise that the next one, really good, was going to conquer the market.
The harsh reality for Intel is that after the initial surprise, few smartphone manufacturers opted for their models, most embracing well-known and proven solutions like those from Qualcomm, Samsung, or Mediatek.
The ARM platform is already synonymous with mobile, and as such it was difficult to convince anyone to jump onto the x86 platform, however proven it was on PC. AND if there’s something that Intel wasn’t going to do, it was to jump into ARM.
Given this, it can be said that the only alternative that the market has given him is to go out the back door.
The PC has a better chance of recovery
The PC market is in a difficult situation, with millions of users who do not want to change the system because they are very comfortable with the one they have now, thanks. It is not that less computers are used, it is that there is no need to change them because they have already reached the level necessary to do most of the things we want.
Excluding enthusiasts and gamers, users have little reason to change computers, a situation that is repeating itself in the tablet market.
At the end of last year we already mentioned it: tablets have stagnated, for a very similar reason: those who want a tablet already have it, and do not see many reasons to buy a new one. Given this perspective, perhaps it is better to bet on the product that has been around for several generations and several crises.
The future is not in the mobile, but in the cloud
Intel is aware of the same as Google, Microsoft, and many more: the important thing is not the device you use, but the services you connect to. And where do those services run? Well, in the cloud, and that’s where Intel can earn a lot. It is no coincidence that the first sentence in Intel’s statement announcing these changes is as follows:
Intel is accelerating its transformation from a PC company, to one that powers the cloud and billions of smart, connected devices.
That is the future of Intel, and that is why it has to abandon the device market to conquer it in another way.