Analysts clashed over a suggestion Intel could find itself a takeover target by 2021 due to lack of strength in the smartphone market.

Jack Gold, president and principal analyst at J. Gold Associates, told Mobile World Live he does not see any companies on the horizon which could acquire Intel and focusing on the US-based chipmaker’s mobile presence overlooked strength in emerging areas including artificial intelligence (AI).

“I strongly disagree with this assessment and speculation. I expect Intel to continue to be an acquirer of technology companies. Just because they are not a major power in mobile devices does not mean they don’t have a future,” he said.

Gold was responding to an assertion by Canalys president and CEO Steve Brazier in his keynote at the Canalys Channels Forum last week that Intel is in big trouble because it missed the smartphone wave.

As a result, Brazier expects Intel to be the subject of a takeover attempt by 2021 at the latest.

In July, Intel switched the focus of its New Technologies Group from wearables to augmented reality (AR): potentially a bid to reposition itself for future growth after the wearables market failed to live up to its hype.

Consolidation
Brazier’s comments come in the wake of Broadcom’s audacious unsolicited $130 billion offer for Qualcomm, a deal which would be the biggest ever struck for a technology company and one of the largest of all time (despite Qualcomm’s claims the price is too low).

To date, the highest successful bid for a chip company is Qualcomm’s $38 billion deal for NXP Semiconductors, an acquisition still going through a lengthy regulatory approval process.

Any approach for Intel would likely need to be more than twice the size of Broadcom’s bid for Qualcomm, since Intel’s revenue is estimated at $61 billion (similar to Samsung’s), while Qualcomm’s revenue is $23 billion ($32 billion if the purchase of NXP is concluded according to data compiled by Broadcom).

Automotive focus
Gold emphasised a bid for Intel would be optimistic, noting the real action in the semiconductor sector will take place behind the scenes in the cloud where many servers will be processing information and performing high-performance computing functions including data analytics, AI, and virtual and augmented reality powering autonomous vehicles.

Intel acquired Mobileye in March for $15.3 billion, a move analysts said put the chipmaker in a good position to gain traction in the autonomous vehicle industry. The company is pushing aggressively in the automotive space, setting up its Automated Driving Group in November 2016. It also took a stake in digital mapping company Here.

“Intel has a commanding lead in that market and will continue to do so even as the ARM-based vendors, particularly Qualcomm, attempt to take market share in this area. Intel’s sales continue to increase, its profits are good and it makes high margins in sales of chips and components,” Gold said.

“How is that a recipe to be acquired? And by whom? Too many still see Intel as a PC chip supplier, when in reality that is a decreasing part of their overall business, and the rest of their growing businesses are quite healthy,” he added.