Intel has its eye on the emerging low-end smart-phone market with its latest Atom processor-based platform. The company currently has minimal market share in the industry, according to the IHS iSuppli/Screen Digest Mobile & Wireless Service, but this move could allow Intel to expand. Intel’s goals are no surprise, as the company expects the value smart-phone segment to reach 500 million units by 2015.

Formerly known as Lexington, the platform includes Intel’s Z2420 Atom processor with HyperThreading technology, which can reach speeds of 1.2 GHz. It also boasts 1080p hardware-accelerated encode/decode and support for up to two cameras delivering advanced imaging capabilities, including burst mode, which lets users capture seven pictures in less than a second in 5-Mpixel quality. And, its XMM 6265 HSPA+ modem offers dual sim/dual standby capability for cost-conscious consumers.

“By targeting the low end, Intel can attempt to address the market with the greatest opportunity for growth in the smart-phone business during the next few years,” said Francis Sideco, senior principal analyst for wireless communications at IHS. “With Intel now holding a negligible share of the global smart-phone applications processor market, the company appears to be taking the steps it needs in order to have a chance at expanding its presence in this segment.”

The low end represents the fastest growing segment of the global smart-phone market, with shipments growing from 206 million to 559 million from 2012 to 2016, IHS says. That’s a 51% compound annual growth rate (CAGR) from 2011 to 2016, compared to the 12% CAGR expected for high-end smart phones during the same period. IHS expects emerging regions where low-end smart phones have the most appeal to generate the fastest growth among all regions for mobile handsets.

Cell-phone shipments will increase at an 8% CAGR in China over the same five-year period, making it the world’s fastest growing region. The Asia-Pacific region follows with a 6% CAGR and Eastern Europe, Africa, and the Middle East at 5%. North America will trail these other regions at 4%.

“In the emerging markets, optimizing the cost/performance balance will be critical for success,” Sideco said. “Intel also will need to heavily leverage its acquisition of Infineon to ensures it offers the best solution involving both the applications processor and the modem—the two primary processing functions in a smart phone.”

Qualcomm currently dominates the application processor market for smart phones, though Intel says Acer, Lava International, and Safaricom all have announced support for the new platform. Intel currently ranks third behind Qualcomm and MediaTek in the overall market for baseband chips governing all kinds of cell phones with an 8.4% share in the third quarter of 2012. Qualcomm tallied 52%.

“While Intel dominates the PC microprocessor market, in the smart-phone semiconductor business, the company has no place to go but up,” Sideco said. “And while Intel certainly faces challenges in achieving the kind of leadership position in mobile handsets it now has in PC semiconductors, the company appears to be serious about building its competitive positioning in the smart-phone market.”

Intel unveiled the new platform at the 2013 International CES in Las Vegas earlier this month, where it won the Popular Mechanics Editor’s Choice Award.

IHS

Intel