Bloomberg News

Intel Angles for Wearable Market With Low-Power Quark Chips (2)

September 10, 2013

Intel Corp. (INTC:US), struggling to break into the market for mobile phones and tablets, said it has a new range of processors aimed at wearable devices such as smartwatches.

The line of chips, called Quark, is designed to draw little battery power and fit in small devices, Chief Executive Officer Brian Krzanich said at a company conference today in San Francisco.

Intel wants its chips to be part of the growing market for gadgets that can be worn and used for fitness, computing and other tasks. Sony Corp. (6758), Samsung Electronics Co. (005930) and other companies have released wearable products. Google Inc. (GOOG:US), whose Android operating system runs most of the world’s smartphones, is promoting the use of its computing eyewear, called Glass. The market for all wearable technology, including smartwatches, will more than double to $18.8 billion in 2016 from $9.3 billion this year, according to market researcher IHS Inc. (IHS:US)

“We tried to build products consumers will want,” Krzanich said. Quark uses “lower power than anyone thought Intel silicon could ever go into,” he said.

Quark chips will be one-fifth the size of Atom, Intel’s current smallest low-power chips, and use a 10th of the power, Krzanich said.

Qualcomm Inc. (QCOM:US), the largest maker of chips for mobile phones, last week announced its own Toq smartwatch, a device built on its display and communications technology. The company is aiming to use that to attract manufacturers to its products.

Smartphone Challenge

Quark will come in multiple variants and be customizable for a range of uses. A greater number of industrial and household devices will be connected to the Internet, Krzanich said. Later in the presentation Intel showed off personal medical devices as an example.

Krzanich is making his first major speech since taking the top spot at the world’s largest chipmaker in May. Under his predecessors, the Santa Clara, California-based company hadn’t been able to translate its dominance in personal computers, where its chips power eight out of every 10 devices sold, into a foothold in the market for processors that power smartphones.

While Intel is struggling to get its chips into mobile devices, the company has a more than 90 percent share in chips that power servers which feed handheld computers the data and services they reply on.

Chip Strategy

That’s helped offset a decline in its main PC processor business, which is predicted to shrink again this year. Global PC shipments will decline more than previously forecast this year, market researcher IDC said last month.

Unit sales will drop 9.7 percent in 2013, the Framingham, Massachusetts-based researcher said on Aug. 29. That compares with a May projection for a 7.8 decline. The market will shrink until 2015, when it is estimated to post “modest” gains at a percentage in the single digits, IDC said.

Reflecting that, Intel reported its fourth straight revenue decline (INTC:US) in the second quarter. Krzanich is seeking to persuade more phone and tablet makers to start using its processors to halt the slide and reignite growth. In order to do that, the company has redesigned its Atom chips, aimed at delivering more performance while using less battery power.

Intel shares rose less than 1 percent to $22.99 at the close in New York. The stock has advanced 11 percent this year, compared with a 28 percent gain in the Philadelphia Semiconductor Index.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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