Seeing the lack of strong growth in the PC market and excess wafer capacity, Intel is looking to resolve its problems by pushing it mobile product business. However, ARM's dominance in the mobile industry is forcing Intel to rely on giving out subsidies to partners to increase its presence in the market which is impacting its profitability as well as its product positioning in the market.
Intel is cooperating with China-based application processor designer Rockchip to start a new business model and will push new chip and solution design services. Through Rockchip's ecosystem in China, Intel is hoping to start up a wafer OEM business and will gradually turn to focus on customized x86 chip products to make price-friendly and competitive products that are more suitable for emerging markets.
To accelerate the establishment of its ecosystem, in addition to subsidies, Intel is also cutting its chip prices, but most vendors still prefer ARM-based solutions as Intel's solutions still lack performance, offer less flexibility for components, and have a cost disadvantage.
Intel mainly eyes Rockchip's software support and existing back-end component and channel relationships. As for why Rockchip decided to partner with Intel, Digitimes Research believes the fierce competition between ARM-based chip products which has caused profits to drop, is the main reason Rockchip decided to work with Intel.
Intel's baseband solutions and x86 extensibility are also key factors behind the partnership in 2014.
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