(By Fred Dunsel) Last week, Microchip manufacturer Intel Corporation (NASDAQ:INTC) suffered a 1.5% weekly decline, when it closed at $26.93 on Friday. The stock is currently up 9.7% for the year.
While Intel continues to dominate the market for CPUs, there is increasing doubt over whether it could replicate similar success in the mobile application processor sector. According to Nomura research, the demand for the latter would be rising by double digits in the coming years, while the growth in PC processors would only be in single digits. Although Intel's chips would be used in Google's Motorola Mobility and Lenovo smartphones, it remains to be seen how they stand up against Apple's A5 and Samsung's Exynos processors. Moreover, with Microsoft cooperating with ARM to compete with Apple products, some analysts are wondering if Intel is missing out on the increasingly lucrative mobile devices market.
Reflecting Intel's acknowledgement of the importance of this key sector, the company concluded an agreement with InterDigital Inc. to buy 1,700 wireless technology patents for $375 million. Bernstein analyst Stacy Rasgon said that the deal should fit will with Intel's mobile strategy.
Meanwhile, another tech company Dell Inc. (NASDAQ:DELL) also suffered a weekly decline of 0.8% last week, after closing at $12.20 on Friday. Dell has been on the decline since peaking at $18.20 in mid-February. The stock is currently down 17.3% for the year.
The computer maker is currently trying to reduce its operating expenses as it expands into the more lucrative areas of technology. Earlier this month, it had outlined its cost-cutting plans, which targeted to save more than $2 billion in the next three years. As part of this revised strategy, Dell is hoping to move from the lower-margin business of making PCs to selling more software solutions and computing equipment to big companies and government agencies. This is particularly pertinent given that PC sales have been slowing in recent years as consumers increasingly switch to smartphones and tablets.