Intel Finally Goes Mobile

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In our previous article on whether one of the old-tech troika, Intel, can grow again, the question was whether Intel can put itself on the map in the new world of mobile computer. On Tuesday, Intel finally scored a card when it unveiled its partnership with Google GOOG to optimize its Android OS on Intel's Atom chip. Granted, this is currently only on the tablets, and it unveiled only a reference design, not announcing any manufacturers who will be using it, this is still a very significant first step for Intel to flex its muscle.

Tablet computers, pioneered by Apple's iPad AAPL, is the fastest growing market for computers, and had pretty much decimated the NetBook. While tablet computers have already demonstrated its strong appeal to consumers around the world, and Apple currently has a tremendous lead in this segment, we believe this is only the beginning for tablet computers.

The real growth of tablets will come when billions of Chinese consumers start buying them, for tablet computers had solved one of the age old problems preventing the older Chinese generation to use computers: inputing Chinese characters without a keyboard. Since Apple's model is always a high premium model, most Chinese consumers will probably buy lower-priced Android based or Windows based tablets manufactured by different manufacturers. Therefore, having its chip supporting the Android platform will go a long way for Intel in securing its place in the Chinese market, the largest PC market in the world.

Intel is not sitting idle to watch ARM
ARMH
taking over the mobile world, as it has
in its pipeline more low power consumption chips to come
. If Intel can deliver what it claims, i.e., laptops using its chips able to go a full day with a single charge, and have the ability to go 10 days on “connected” standby, Intel could very well have a bright future in the mobile world powering laptops, tablets, and smartphones. Intel, now trading at ~$20.75/share, spots a dividend yield of >3.5%. If Intel was to go back to below $20/share, investors should keep a close eye on it since it has a great yield and it has now put itself into play in the mobile market. If investors are still concerned with the economy and the dwindling of the PC market, they can look into writing a 2012 Jan 17.5 put, which will put Intel into yielding >4 % and currently has a premium of $0.63, or a 3.6% yield with only 4 months away. * For the other two stocks,
MicrosoftMSFT
and
Cisco SystemsCSCO
in the Troika, they have been doing fine lately given the volatility of the market these days. Investors should keep an eye on them as well if they believe these giants can be revitalized by their new strategies.
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