Lenovo Could Be Intel's Best Shot at Gaining a Foothold in Smartphones

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Ever since Apple revolutionized the computing world with its iPhone and iPad, the rest of the industry has been quick to try anything and everything to get in on that action. Unfortunately for Intel , Apple's iOS devices use proprietary, Apple-designed silicon, which locks it out of winning the market share leader spot. Not to fret, however, as recent market share numbers have shown the rapid rise in non-Apple mobile market share in explosive growth markets. As Intel's chips can power both Microsoft Windows and Google Android devices, the field is still wide-open. But to really win, Intel needs strong device partners to make sure that its chips end up in designs that sell.

Enter Lenovo
Lenovo is a shining success story in the computing market, as it has risen through the ranks to become the world's top PC vendor by market share during the second quarter of 2013. Lenovo has built a brand that resonates with consumers and corporate customers alike, particularly as its products are consistently best-in-class. Further, the company has been swift to adapt to the weakening PC environment, defensively growing share in PCs while aggressively forging ahead as a mobile player.

Lenovo's efforts in smartphones and tablets have been rather successful to date, with models such as its K900 (Intel-powered) proving to be top-five sellers in China. In tablets, it looks as though Lenovo has really hit it out of the park with its upcoming Miix lineup featuring Intel's "Bay Trail" processors. Its machines are well-designed and come at rational price points. Case in point, Lenovo's upcoming eight-inch Miix tablet will sport a quad-core Atom, eight hours of battery life, a 1280x800 IPS panel, and a full copy of Office for just $250. While it's too early to call it an "iPad Mini killer," it certainly sounds like a compelling product.

Intel would do well to expand its partnership with Lenovo
Lenovo is one of Intel's major customers in the PC, server, and cloud/enterprise storage market. This relationship is one that Intel would do well to extend. While both Intel and Lenovo announced a joint multi-year, multi-device smartphone partnership (and as noted above, the most recent Intel/Lenovo device has been a best-seller in China), the vast majority of Lenovo's smartphones come packed with ARM-based system-on-a-chip designs from lower-end chip vendors such as MediaTek.

Now, the bad news for Intel is that the chip lineup it offers for smartphones isn't up to the task of competing with Chinese parts at the low end and heavy hitters like Qualcomm at the high end. On the other hand, the good news is that Intel's upcoming "Merrifield" system-on-chip, coupled with the firm's own multi-mode 3G/LTE modem, should be shipping to customers by the end of this year, just in time for designs to be revealed at Mobile World Congress 2014.

Intel would do very well if the company can win as many Lenovo designs as possible with its "Merrifield" platform. Lenovo opens the door to China (and beyond) for Intel in the smartphone market, and given that many of the well-known phone players have deep relationships with Qualcomm, Intel could use as many allies as it can get as it establishes itself in the smartphone market.

The Foolish bottom line
While investors are fixated on Intel striking a deal with Apple, there's plenty of growth to be had from other players in this fairly new market. Lenovo is a player destined for greatness in whatever segment it decides to tackle. Intel investors should watch closely for further signs that this relationship is expanding, particularly in phones. Lenovo's on the way up, and if Intel can take advantage of it, it should be great for Intel's long-term investors.

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The article Lenovo Could Be Intel's Best Shot at Gaining a Foothold in Smartphones originally appeared on Fool.com.

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple, Google, and Intel. The Motley Fool owns shares of Apple, Google, Intel, Microsoft, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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