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Wednesday, October 17, 2012

Is Intel the Next RIM (Blackberry)?

As we all know, Intel is famous for its processors and I remember back in the day when I went from a 386-Mhz PC to a Pentium II (thanks Mom!) and then after working a summer selling Rogers Cable TV and internet, to a Pentium 4 with hyper-threading. Yes I sometimes like to skip a generation of tech, especially when you're a student and you don't have one or two G's laying around. You would have to fast forward five years to see my current PC with a Core i3 processor that I got three years ago.

I was never one to stray away from the Intel chips, although I don't feel that emotionally attached to to the brand. There was always a sense of getting the "best" with Intel but it seems that their lack of mobile processor innovation is going to haunt them sooner rather than later.    

RIM's Blackberry, enjoyed an amazing run during the last 10 years and believe it or not, 2011 was RIM's most profitable year ever. That was just last year people!

RIM Annual Data, Source: Google Finance
Intel Annual Data, Source: Google Finance

Intel isn't in the most precarious situation as they are still a market leader in the semi-conductor industry and there are a lot of PC and servers out there. The question is, will Intel fall victim to the complacency that inevitably caused RIM to fall from grace?

Here are some interesting facts to consider:

- Intel had its first sales decline in 12 years and at the same time, the PC market shrank for the first time in 11 years
- PC and laptops sales are declining due to the rise of tablets
- Intel has 0.2% of the mobile chip market (dominated by NVIDIA, Samsung, Apple)
- Intel's high-end chips are about 25% the cost of your laptop. Its mobile Atom processor costs $42-$47, compared to the $10-$25 chips found in most smartphones and tablets.

Source: Quartz

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