Intel has an ambitious goal for 2014: get its Atom chips into 40 million tablets, or four times the number of tablets that had Intel inside in 2013. But rather than do it by tailoring its products to what tablets now demand, the cash-rich company has another plan: pay tablet makers to use its chips.
That's essentially what Intel is doing through a program first disclosed at its financial analyst meeting in November. Intel will pay tablet makers to cover the additional component costs of using its Bay Trail chips instead of ARM-based processors, and it will also help cover the engineering costs of designing an Intel tablet.
The Intel division that makes Bay Trail will incur a "significant increase" in its operating loss to pay for the plan, CFO Stacy Smith said at the November meeting, but the upshot is likely to be a lot more tablets based on Intel chips, potentially even from big players like Samsung.
"Basically, they're making an investment to make up for them being slow to get into the market," said Dean McCarron, principal analyst at Mercury Research.
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