When Qualcomm (NASDAQ:QCOM) and Apple (NASDAQ:AAPL) settled their differences, giving Apple access to Qualcomm’s 5G modem technology, Intel (NASDAQ:INTC) bowed out. A loss in that business sent the stock up on the day for a very good reason. Intel may bring its focus back to its core businesses.
Intel’s 5G technology would have had trouble competing with Qualcomm’s solution. Qualcomm is well-known for its better technology, efficiency and reliability. Intel would have had trouble beating Qualcomm in the market. Markets welcome its exit because Intel has other battles to fight.
AMD (NASDAQ:AMD) is ahead of Intel on delivering better EPYC datacenter solutions. But for now, Intel is not losing enterprise customers, who are used to buying Xeon solutions and get preferential discounts. That lead may not last because EPYC-powered solutions give customers more value. As more businesses switch to EPYC, Intel’s revenues could erode.
In the PC space, AMD’s Ryzen gives more core counts and less power usage than Intel but Intel’s integrated GPU and faster CPU could keep it relevant. Intel now must redouble its efforts in the budget to mainstream markets.
Mobileye and Altera are performing at a decent pace but could do better. Intel has a chance to accelerate revenue growth in these markets.
Now that the 5G modem business is out, management may reallocate its resources and efforts in this business.
