The Pressure’s on for Intel

Since 2000, Intel has done just about everything right in its core business, maintaining its dominance of the market for PC microprocessors and putting substantial distance between itself and competitors in the market for server chips. And yet the company finds itself in a very tough position: computers are going mobile, and Intel’s share of the microprocessor market is falling off a cliff.

As shown in the chart above, 61 percent of all computing devices shipped in 2011 were of the mobile variety—up from less than 1 percent in 2000. Because most of those devices rely on technologies other than Intel’s, the company’s share of the total market for processors in computing devices has fallen from 80 percent to around 30 percent.

The company is finally entering the mobile game, but barely. The Linley Group forecasts that Intel will grab 0.7 percent of mobile processor shipments in 2012. So far it has gotten away with this meager showing because the mobile chip market as a whole remains relatively small—it is forecast to be around $5 billion in 2012, compared to $31 billion for PCs and nearly $10 billion for servers. But as the PC market slows and the popularity of smartphones and tablets continues to balloon globally, Intel will have to adapt or be left behind.