Intel turns to Chinese tablet makers

Computer chip and fashion bag maker, Intel is turning to cheap and cheerful Chinese tablet makers to make a quick buck.

Supreme Chipzilla Brian Krzanich, who took over as chief executive nearly a year ago thinks that with the help of China’s multitude of low-cost brands he can restore the glorious Intel empire upon which the jelly never sets.

According to the FTKrzanich was in China to flog his glorious vision to local companies and he told them that while Intel has been known as the “guys inside the PC” which also do data centre stuff, he wanted to show is that we’re going to go across the spectrum of computing products.

A bigger presence in smartphones and tablets is key for Intel as the PC market continues to shrink. Analysts expect the company to report revenue of $12.8bn, up 1.9 percent year on year.

Now the smartphone market is saturated and the tablet market is grinding to a halt, it seems that the only place that wants them are developing countries, which is why Krzanich is hitting up the manufactures of cheap stuff.

An estimated 300 million tablets will be made this year, and Krzanich wants Intel’s chips in 40m of them, or “four times growth” for his company. Of those 300 million, Intel projects that 100 million will be made by companies in Shenzhen and its environs, meaning Krzanich must win over the manufacturers he was in town to meet.

He showed off Intel’s new chips, which fit the locally made cheap tablets that retail for around $100. Intel says its processors may cost more than rivals’ may, but that their superior quality will win customers for the tablet makers.

After all customers can often tell the difference in chip quality even more than they can an interface.

Chinese local chip companies have far cheaper prices, better relations with nearby manufacturers, and a history of specialising in tablets and smartphones. This is exactly the sort of chip that Intel has not made until recently.

Pricing is part of the problem. Intel’s tablet processors sell for around $30-$50 globally, estimates Romit Shah, an analyst with Nomura. In China, Rockchip and others are selling those for $5-$10 each.