Intel aims to enter tablet market with Oak Trail processor

EL SEGUNDO, USA: Seeking to capitalize on the fast growth of the tablet market relative to its core PC business, Intel Corp. has come off the sidelines with a microprocessor designed specifically for iPad-type devices, dubbed the Oak Trail, according to the market research firm iSuppli Corp.

While growth will be modest during the years to come for PCs—Intel’s traditional bedrock for revenue—expansion is unstoppable in the sizzling tablet market, led by Apple Inc.’s bestselling iPad, iSuppli findings show.

A comparison between the relatively limited growth vista for PCs versus the panoramic expansion landscape for tablet devices shows why Intel is serious about getting into the tablet game.

Global PC shipments in 2011 are forecasted to rise by 12.5 percent from 2010 and by 11.3 percent in 2012 compared to 2011. Tablets, in comparison, will surge by a mighty 197.7 percent in 2011 and by 57.4 percent in 2012.

The figure compares iSuppli’s percentage growth shipment forecasts for PCs and tablet devices in 2011 and 2012.Source: iSuppli, USA.

Oak Trail: Intel’s pathway through the thicket
In a market dominated by Apple and its ARM-based A4 microprocessor, Intel’s foray into tablet devices represents a realization by the chip titan that it needs to enter this space in order to remain competitive. Already, the tablet market is expected to heat up, with big names like Samsung Electronics, Toshiba Corp. and Dell Inc. announcing tablet devices of their own to go head to head with the iPad.

With Oak Trail, Intel hopes to make some much-needed headway into the tablet market, even though the microprocessor is not scheduled to begin shipping until early 2011.

First announced by Intel in June this year—two months after Apple launched the iPad—Oak Trail is a System On a Chip (SOC) solution designed exclusively for tablets. Based on published reports, Oak Trail will consume as much as 50 percent less power than previous processors from the company and also will offer full high-definition video.

More important, Oak Trail will work on three operating system platforms—Android from Google, Windows 7 from Microsoft and MeeGo from Nokia—potentially expanding the universe of tablet devices in which the Intel processor might be used.

Matt Wilkins, principal analyst for compute platforms at iSuppli, believes Oak Trail’s compatibility with the various operating systems stemmed out of Intel’s frustration at seeing the iPad selling millions of units—figures that any company, Intel included, would have welcomed gladly.

“Intel is smart,” Wilkins said. “The company knows perfectly well that the media tablet market is being defined right now. And if the company doesn’t become a player immediately, its prospects of getting into the market in the future will only grow dimmer.”

For now, without Intel’s presence in the sector, each sale of a tablet device means a blow to the Intel processor in terms of evaporated revenue. It also could represent a missed sale in a PC that likely included an Intel-based processor.

Intel’s Atom processor revenues were down 4 percent sequentially in the third-quarter, which many construe as a sign of cannibalization by tablets.